"RaS" <nob...[at]home.com> wrote:

- quote -

** Yes, if you're over 50 you can contribute an additional
$5,000 for a total salary deferral limit of $20,500 in 2007.
(The base contribution limit is $15,500, increased from
$15,000 in 2006.)**

- quote -

**You can contribute up to 100% of your compensation. So
assuming you've made $20,500 on the year, then yes, you can
contribute the maximum. You'd just have a much shorter time
to do so. **

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RaS wrote:

- quote -

This year's maximum employee deposit is $15500, plus the
$5000 catch-up if 50 or over.

Each plan can decide on the maximum percentage allowed. This
is to avoid "top heavy" issues where highly compensated
people put in too much in comparison to the rest. I believe
this does not apply to the catch-up portion.

My employer allows withholding of 30% for regular
contribution, and additional 30% for catch-up. So a 50 year
old can save 60% of gross income until the $5K for the
catch-up is accumulated, then it drops to just the primary
30%. You need to check your benefit documents or call the
benefits department to confirm maximum percent. No offense
to co-workers in general, but an average employee is not
likely to know this. If for no other reason, than the fact
that none are likely to want to save such a high percent.

JOE

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"RaS" <nobody[at]home.com> wrote
- quote -

Talk to the plan administrator (someone at the company) who
can confirm their rules, but generally contributions are
based on the income for the period you were an active
participant, meaning the earnings from November and
December.

If so, maybe ask the employer to defer your pay till you are
a plan participant so you can bulk up those last two months.

Unless there's some matching issues they don't want to get
in to, they should be able to oblige.

--
Paul A. Thomas, CPA
Athens, Georgia

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"RaS" <nobody[at]home.com> wrote:

- quote -

The $20,000 is your maximum deferral from all salary
sources. Thus, if you had 401(k) deductions of $10,000 at
your prior job, you have only $10,000 left to defer this
year. You are responsible for seeing that you don't go over
the limit.

That said, if you haven't had any prior deferrals in 2007
and you earn at least $20,000 at the new job in 2007, tax
law allows you to contribute the full $20,000. Your plan
may have restrictions that prevent it.

--
Phil Marti
Clarksburg, MD

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I have a general question on 401k participation that I was
hoping somebody could help me with.

I'll be starting a new job in Aug. and their 401k plan will
allow me to start participation after 3 months. I'm 50+ so
I think I qualify for the catch-up provision ($20k/yr?).
The question is, if I can participate after 3 months how
much can I contribute to the plan for this year? Can I just
put in wages earned for Nov & Dec (much less than $20K) or
can I contribute the maximum amount specified by the
catch-up provision up to my total compensation from Aug
through Dec?

Thanks for any clues.

<< ------------------------------------------------------- > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ------------------------------------------------------- >