Accidentally over-contributed to my 401k by $21k after job change - today's the deadline for excess refund - what are my options?

Thank you so much for this clear advice! I just sent detailed emails to both HR departments and both financial institutions. Should I also fill out any specific forms or just wait for them to tell me what I need to do next? I'm worried they might just ignore my emails since it's the weekend.

You've done the most important part by sending those emails - that establishes your request date. No specific forms are needed immediately; each plan administrator will have their own process they'll guide you through. They won't ignore your emails - these companies have systems to track all communications, even those received over weekends. When you call Monday, reference your email and ask them to confirm receipt. Be prepared with your account numbers and the specific amount you want returned from each plan. If one administrator seems confused, ask to speak with someone who specializes in excess contribution corrections - this is a common enough issue that they deal with it regularly.

Does taxr.ai actually contact the 401k providers for you or do they just give you guidance? My husband is in a similar situation but with a 403b and 401k combination from working at both a hospital and private practice.

I'm kinda skeptical about these services... how do they actually have any more info than what's freely available on the IRS website? Seems like another way to extract money from people in tax panic mode.

They don't contact providers directly - they provide the exact documentation and wording you need to use with each specific provider. For example, they gave me templates that included all the necessary regulatory language that made the administrators take my request seriously. The IRS info is definitely available for free, but honestly it's written in such confusing language. What I found helpful was they simplify everything and walk you through exactly what applies to your specific situation. They also showed me how to calculate the earnings portion that needs to be returned along with the contributions, which wasn't obvious from the IRS materials. Nothing wrong with using free resources if you understand them, but for me the guidance was worth it when I was stressed about potential penalties.

How does this even work? I don't understand how some third party service can magically get you through phone queues faster. Sounds like a scam to me.

Right, like they have some special back door into Vanguard? No way. These companies all have the same annoying phone systems and there's no way around it. You just have to wait on hold like everyone else.

It's not magic - they use a combination of technology that navigates phone trees and holds your place in line. Basically they have a system that calls repeatedly using different entry points until they get through, then they connect you once they have a human on the line. I was super skeptical too until I tried it. I don't know all the technical details of how it works, but I do know I wasted 3 hours on hold one day, then used this service the next day and was talking to someone in minutes. For time-sensitive stuff like the OP's situation, waiting on hold for hours might not be an option. I'm just sharing what worked when I was in a similar panic mode about my 401k issues.

That's actually incorrect. According to IRS regulations, the deadline is for notifying the plan administrator, not completing the distribution. The regulation specifically states: "If the employee notifies the plan of the excess by April 15, the excess amount is not subject to double taxation." The actual distribution typically takes several weeks to process, but as long as the request is made by the deadline, the participant is considered compliant.

I work in benefits administration and handle these cases regularly. You're right that the notification deadline is April 15, not the distribution completion deadline - that was my mistake. What I should have clarified is that proper documentation of the notification is crucial. An email might work, but some plan administrators require specific forms to be submitted. The safest approach is to follow up with both administrators on Monday and ask them to confirm the appropriate procedure while referencing your weekend emails as initial notification.

The excess contribution amount gets added to your taxable income for the year you receive the distribution (so this current tax year, not last year). The earnings portion is also taxable in the current year. You'll get a 1099-R form showing the distribution. The good news is you avoid the 6% excess contribution penalty this way. The returned amount is technically taxed twice (once when contributed, once when distributed), but that's still better than the 6% penalty repeating every year until fixed.