W-2 Box 12 I have two separate entries 401K contributions two tax years

Forum|Forum|2 years ago
January 19, 2024
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On my 2023 W-2 I have two different "D" elective 401K contributions, on for 2023 tax year and one that is retroactive for 2022 tax year. On W-2 shows up as D 22 $3357 and D $30,000. Turbotax has no method to code for contribution for prior tax year only option is D. By IRS regulations each contribution must be reported separately and should be coded based on the tax year its earmarked for yet there is no method to do this in the tax program. You can go to the forms mode and include comment, but those comments are never sent to the IRS. Turbotax identifies this as an error, "two entries with same code" and even if I was allowed to combined the two entries it would then be above the maximum allowed for 2023 for people over 50. Therefore, what can I do to correct the error in turbotax. Please don't tell me to print out my tax forms, write sometime in on the tax forms and mail my taxes to IRS because my taxes are usually 80+ pages long and I have had several issues with some of my recent amended returns reaching the IRS so I prefer not to have write something in and mail them.

TurboTax Home & Biz Windows

Best answer by dmertz

Because you've maxed out the employee elective deferral at your W-2 employer, you can't use the Maximize option for a solo 401(k) contribution because the Maximize function for a 401(k) contribution assumes no employee contributions to any other 401(k), 403(b) or SIMPLE plan. As you observed, the Maximize function is incapable of taking into account amounts reported in box 12 of a W-2. You'll instead need to use the maximize option for a SEP-IRA contribution to calculate just the permissible employer contribution to the solo 401(k).

dmertz

Employee

There are many posts here each year regarding this issue. Unfortunately, the only solutions in TurboTax are either to omit the entry of the prior-year amount or to combine the amounts on a single code-D entry and then ignore the warning about overcontributing. The warning about overcontributing has no effect on your ability to file. Omitting the prior-year amount would be extremely unlikely to affect your tax return since doing so would almost certainly not affect your eligibility for a Retirement Savings Contributions Credit given that the combined deferrals exceed the annual deferral limit.

LaJollaAuthor

Employee

If I enter 2 different D than Turbotax returns with error message telling me I have two identical code D entries, if I add the amounts together the Turbotax program will erroneously assume here was an excess 401K contribution for current tax year. If I omit the D22 amount, then I will get an error regarding the differential between taxable wages in Box 1 and Box 3 (i.e. the data entered on my W-2 form shows exactly why a portion of Gross Wages-Box1 was not taxable which is done by the entries listed in Box12. My W-2 shows that my combined elective 401k deferral for 2023 (the D-30,000 for 2023) and retroactive deferral for 2022 (D22 3357) were deducted from my Gross Wages from 2023 which is the same amount shown for Medicare wages in Box 3--- and Taxable wages in Box 1 is 33,357 less than Box 3. Although TT home and Business desktop version allows you to enter "additional information sheets" this information is never transmitted to IRS and simply acts as notes for the tax-payer. There should be something somewhere in the Turbotax program to allow a taxpayer to properly document the information on their W-2 to account for retroactive retirement deferrals for a prior tax year. I know the situation is not common, but its not unheard of and it is in the tax code/regulations. I also have a solo-401K plan because I also work as an independent contractor and I am allowed to contribute 20% of my net income minus 1/2 self-employment tax as an "employer" to my solo-401K, yet when I attempt to use the auto-calculate (maximize contribution to individual 401K) the turbotax program incorrectly comes up with an amount that would be equal to the amount I could have contributed as an "employee" had I not already contributed and maximized my employee contribution via my W-2 job. I am uncertain if the box in tubotax only works to calculate the maximum amount an "employee" can contribute, or if the turbotax program is not properly "seeing" the amounts I already enter in box 12 on my W-2. Any suggestions for either issue?