What do I do if I over contributed to my 401K plan by accident?

I switched companies mid-year and consequently I have over contributed to my 401K plan by accident, i.e. went over the $15,000 government limit. What do I do?

Answer:
Tell your employer about this. They will cut a check for the difference. At the end of the year you will get the 1099 form and you will have to report this in your tax returns. Make sure you do that.

You will owe taxes on this amount. But no penalty. But remember, you will not get any interest or returns from the investment that you had made in the 401k account.
Let your current company know that you over contributed. They will most liekly reduce your contributions through the end of the year to bring it in line, or they may cut you a check for the over-contribution amount.

If this is a prior year then they will most likely cut you a check. The amount would then be subject to taxes and withholdings, so don't expect the full amount.

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