401(k) contributions


P

Paul Hopper

I am making both normal contributions and catch-up
contributions to my 401(k).

If I exceed the $13,000 limit for the normal contributions,
will I get a refund for the amount exceeding the limit?
 
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J

John H. Fisher

I am making both normal contributions and catch-up
contributions to my 401(k).

If I exceed the $13,000 limit for the normal contributions,
will I get a refund for the amount exceeding the limit?
If you don't retreive the excess, you'll be subject to a
penalty tax 'til you do.

"Jack" - John H. Fisher - (e-mail address removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=:)
 
P

Phil Marti

I am making both normal contributions and catch-up
contributions to my 401(k).

If I exceed the $13,000 limit for the normal contributions,
will I get a refund for the amount exceeding the limit?
If you make excess contributions to a 401(k) the plan MAY
return the excess to you. They're not required to. If you
have an excess that isn't returned you wind up paying tax
twice on the amount. See Publications 525 and 575.

Phil Marti
Clarksburg, MD
 
A

Arthur L. Rubin

Paul said:
I am making both normal contributions and catch-up
contributions to my 401(k).

If I exceed the $13,000 limit for the normal contributions,
will I get a refund for the amount exceeding the limit?
It depends on the plan document. My present employer gives
me the option of either stopping the contributions at
$13,000, or having them continue as after-tax contributions
into the parallel 401(a) plan.
 
D

David Woods, EA, ChFC, CLU

Paul Hopper said:
I am making both normal contributions and catch-up
contributions to my 401(k).

If I exceed the $13,000 limit for the normal contributions,
will I get a refund for the amount exceeding the limit?
If your plan allows catch up contributions, it will be a
catch up contribution up to that limit. The plan should not
allow deferrals beyond that whatsoever.
 
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R

Rich Carreiro

If you don't retreive the excess, you'll be subject to a
penalty tax 'til you do.
That's not true with a 401(k). The only "penalty" is that
(a) you don't get a deduction for the excess contribution
and (b) despite not getting a deduction on it, the excess
contribution is still taxed when withdrawn.

In other words, the penalty on the excess contribution is
that it is double-taxed.

But there's no ongoing penalty like with an excess IRA
contribution.
 
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