Hello,

A owner only business (no employees) has a Solo 401k. They made an excess employer profit sharing contribution for the prior year. I am finding conflicting info on how this should be corrected. My questions are:

1. What is the process for correcting this?

2. Can they remove the excess by the business’ tax filing deadline, plus extensions to avoid penalties?

3. I have seen info that says they must leave the excess in the account, carry over the excess, and deduct in future years. Is this correct?

4. If carry over is available, is there a 10% penalty if this method is used?

Thanks!