rewrite this title Solo 401k Excess contribution: What to do if you contribute more than the Solo 401k limit
The Solo 401k plan has one of the highest contribution limits among qualified retirement plans. This limit, however, can vary based on different factor such as the plan participant's age, income level and the form of business. If you contribute more than your limit, what should you do? Watch this Solo 401k Quick Tip video to learn more. For more information please visit our website or contact us at 949-228-9394. If you contribute more money than the allowed limit to your Solo401k, you will have to either carry over the excess amount to the next year, or pay an excise tax for the excess amount. If you decide to carry over the excess contribution, it will be combined with your contribution next year. If you decide to keep the contribution for the year instead, it will be considered a nondeductible contribution, and trigger an excise tax. This tax is usually 10% and you will also need to report these contributions on Form 5330. Excess contributions can also be removed.