402(g) excess for self-employed individual

[DLavigne]

If a self-employed individual exceeds the 402(g) limit, is he subject to the refund correction?  He didn't get a W-2 and his tax return hasn't been filed yet so he really hasn't taken the deduction at this time.  Could his accountant change the deferral on his tax return to $25,000 (2019 limit) and then we could apply the excess to another contribution type for 2019 (ie. match true-up or PS)?

[Bird]

17 hours ago, DLavigne said:

If a self-employed individual exceeds the 402(g) limit, is he subject to the refund correction?  He didn't get a W-2 and his tax return hasn't been filed yet so he really hasn't taken the deduction at this time.  Could his accountant change the deferral on his tax return to $25,000 (2019 limit) and then we could apply the excess to another contribution type for 2019 (ie. match true-up or PS)?

The answer boils down to "yes", at least as we would handle it.  All contributions for a self-employed are treated the same on his/her 1040, so then it is a matter of deciding how to allocate on the admin side.  The way I see it, a self-employed cannot exceed 402(g) if things are done properly - and by that, I mean having an election in place before the end of the year, and that election cannot or at least should not elect greater than the 402(g) limit.  So if s/he is just throwing money at the plan, which is not uncommon, then the amount received up to the 402(g) limit is deferrals, and anything else is...something else.  Whether that something else is within those limits is another matter, but likely no problem at all.