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Hello, I have a client who contributed the max to a solo 401k for 2024. I filed for an extension while the client was waiting for some additional documents. The documents changed the max allowable to contribute to the 401k, however the client already made the contribution thinking it had to be done by 4/15. We are now past 4/15 - can the client simply withdraw the excess given the extension? He was advised by the brokerage bank to file form 5330, which reading briefly seems to be for a refund of excise tax. Any guidance which schedule should I complete?
Thank you!
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If the contribution was paid in 2025, treat the excess as a 2025 contribution. Keep track internally. The software won't do it for you.
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The contribution was made in 2025. I know you can just keep it internal with a SEP, but can you do that with a solo 401k? When the client made the contribution, they selected it was for year 2024. Thank you.
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"We are now past 4/15 - can the client simply withdraw the excess given the extension?"
No. The deadline is 4/15.
"He was advised by the brokerage bank to file form 5330"
Yes. You need to determine if that is the "employee" share or the "employer" share.
I found some articles for your reference:
https://www.mysolo401k.net/dealing-excess-nondeductible-solo-401k-individual-k-contributions/
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