I had almost the exact same situation happen to me two years ago - all my 401k contribution amounts were correct in the various Box 12 codes, but Box 13 was left unchecked. I ended up contacting my employer's payroll department, and they told me it was a "system glitch" that affected about 200 employees that year. They issued corrected W-2s pretty quickly once they realized the scope of the problem. The corrected W-2 arrived about 10 days later with Box 13 properly checked. While it probably wouldn't have caused major issues to file with the incorrect version (since all the actual contribution amounts were right), I felt much better having the proper documentation. I'd definitely recommend reaching out to your payroll department - they might already be aware of the issue and working on corrections for multiple employees. In my experience, this type of error is often systematic rather than isolated to just one person's W-2.

This is definitely a mistake that needs to be corrected. Box 13 should be checked whenever you participate in an employer-sponsored retirement plan like a 401(k), regardless of whether you make traditional or Roth contributions. The checkbox indicates to the IRS that you're an "active participant" in a qualified plan, which affects your eligibility for deductible traditional IRA contributions if your income exceeds certain thresholds. While your actual 401(k) contribution amounts are correctly reported in Box 12 (which is what matters most for tax calculations), the missing Box 13 checkbox could potentially create confusion if you're also making IRA contributions. The IRS uses this information to determine whether your IRA deductions should be limited or phased out based on your income level. I'd recommend contacting your payroll department to request a corrected W-2. This is a fairly straightforward fix for them, and having accurate documentation will prevent any potential issues down the road. Most payroll systems should automatically check Box 13 when there are retirement plan contributions, so this was likely an oversight during year-end processing.

I messed up my taxes because of the exact same issue last year. TaxSlayer actually has a decent workflow for this, but it's super hidden. You need to: 1) Go to Federal > Deductions > Adjustments 2) Look for "Did you make excess contributions to your retirement account?" 3) Select Yes and follow their steps What's annoying is they don't explicitly mention Line 1H anywhere in their interface but when you complete it, it does properly show up there on the final Form 1040.

I've been dealing with excess 401k contributions for the past two years due to job changes, and I wanted to share what I've learned through trial and error. First, it's important to understand that Line 1H is specifically for reporting excess contributions that you've already had corrected (meaning you've received the excess back from your plan administrator). If you haven't corrected the excess yet, you'll need to contact your plan administrator first to request a return of the excess contributions plus any earnings. For software that properly handles this, I've had success with FreeTaxUSA and TaxAct. Both have dedicated sections for excess retirement contributions. In FreeTaxUSA, look under "Income" > "Less Common Income" > "Other Income" and there's a specific option for "Excess retirement plan contributions returned to you." One thing that caught me off guard was that you might also need to file Form 5329 if you had the excess contributions in your account at the end of the tax year, which triggers the 6% penalty. Most software will automatically generate this form when you report excess contributions. My advice is to call your 401k plan administrator first to understand exactly what they did with your excess contributions, then choose software based on your specific situation. Don't assume all "excess contribution" features are the same - some only handle IRA excess, not 401k excess.

Something nobody mentioned yet - watch out for the personal use portion of any vehicle expenses! If your S Corp reimburses you for 75% of costs based on business use, make sure you're personally paying for the other 25% directly. Don't run personal vehicle expenses through the business. I made this mistake and had some distribution reclassified as taxable compensation during an audit. They were particularly interested in my vehicle reimbursements and documentation. The accountable plan rules are strict - it must be for business expenses only, within a reasonable time period, and any excess reimbursements must be returned.

Great thread! I'm dealing with this exact scenario and have learned a few things that might help others. One thing I'd add is about timing - make sure your S Corp reimburses you within a reasonable time period (IRS generally considers 60 days reasonable) after you incur the expenses to maintain the accountable plan status. Also, for the business use percentage calculation, I highly recommend using a GPS-based mileage tracking app rather than manual logs. I use MileIQ which automatically tracks all my trips and I just categorize them as business or personal. This creates bulletproof documentation that's much more reliable than handwritten logs, and it timestamps everything automatically. The key is consistency - whatever method you use to calculate your business percentage, stick with it throughout the year. Don't cherry-pick high business use months for reimbursement calculations. The IRS wants to see a systematic approach that reflects your actual business usage patterns.

Great question! I went through this exact same situation with my LLC last year. The key thing to understand is that guaranteed payments are treated as self-employment income for tax purposes, but the mechanics of how the money flows can be flexible. Your LLC can absolutely withhold the $1,000 for your 401(k) contribution directly from the $12,500 guaranteed payment and remit it to the plan, then pay you the remaining $11,500. This is actually preferable from a cash flow perspective and keeps everything clean administratively. The 401(k) plan administrator generally doesn't care about the source - they just need to receive the contribution and proper documentation. What matters for tax purposes is that the full $12,500 still gets reported as guaranteed payments on your K-1, regardless of whether $1,000 went directly to your 401(k) or through your personal account first. Just make sure your operating agreement is clear about this arrangement, and that your bookkeeper properly tracks the full guaranteed payment amount for tax reporting. The IRS views the entire $12,500 as taxable guaranteed payment income to you, even though part of it went directly to retirement savings.

One thing I'd add to this discussion is the importance of getting your payroll provider on board early if you use one. We ran into issues initially because our payroll company wasn't familiar with processing 401(k) contributions from guaranteed payments. They kept trying to treat it like regular employee payroll with tax withholdings, which created a mess. We had to educate them that guaranteed payments are already subject to self-employment tax, so there's no additional payroll tax withholding needed - just the straightforward transfer to the 401(k) plan. Also, make sure you coordinate the timing with your plan's contribution deadlines. Most plans require contributions to be made within a reasonable time after the guaranteed payment date. We typically process ours within 5 business days of issuing the guaranteed payment to avoid any potential issues with the Department of Labor's timing requirements. The bookkeeping approach Carmen mentioned is spot-on - that's exactly how we handle it and it keeps everything clean for tax reporting.

Just wanted to add - make sure you keep copies of EVERYTHING related to your nondeductible contributions forever (or at least until you've withdrawn all the money). I learned this the hard way. I had made nondeductible contributions years ago, filed my 8606 forms properly, but then lost track of the paperwork during a move. When I started taking distributions years later, I couldn't prove my basis to the IRS and ended up paying tax on money that should have been tax-free coming out. The burden of proof is 100% on you to track your nondeductible basis, not on the IRS. They don't keep easily accessible records of your basis year to year.

Great advice from everyone here! I went through this exact situation last year when I discovered I had missed filing Form 8606 for multiple years of nondeductible contributions. One thing I'd add that helped me tremendously - when you mail your Form 8606, use certified mail with return receipt requested. The IRS can be slow to process these forms, and having proof of delivery gives you documentation that you filed it timely (even though it's late for the original tax year). Also, consider keeping a detailed log of all your IRA transactions going forward. I created a simple spreadsheet that tracks: - Date of contribution - Amount contributed - Tax year it applies to - Whether it was deductible or nondeductible - Form 8606 filing status This has made my annual tax prep so much easier and ensures I never miss tracking my basis again. The few hours spent organizing this information upfront saves tons of stress later, especially if you ever need to prove your basis to the IRS during an audit or when taking distributions. Your numbers look correct for the 2022 form, and yes, you should include the full $15,500 basis on your 2023 Form 8606 even if the 2022 form hasn't been processed yet. The key is that you're filing it before or with your 2023 return.