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#3
04-20-2009, 10:31 PM
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 Re: Tax Penalty for putting in too much in a 401K "Gary" wrote: - quote - > There are 2 401K plans from 2 different jobs. Let me know if this
It sounds like an excess deferral. See the discussion on page 10 of> makes a difference. Publication 525. -------------- Phil Marti, VITA Volunteer Clarksburg, MD -- << ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- > |
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#2
04-20-2009, 07:57 PM
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| Re: Tax Penalty for putting in too much in a 401K On Mon, 20 Apr 2009 13:38:47 EDT, spope33[at]speedymail.org (Steve Pope) wrote: - quote - > Gary <ghorne2000[at]yahoo.com> wrote:
There are 2 401K plans from 2 different jobs. Let me know if this> > What is the Tax Penalty for putting in too much into a 401K ? > The plan could make a corrective distribution to you, which > is taxable. There should not be a penalty in the baseline case, > but both the excess contribution amount, and the earnings on it, > will be taxable, possibly in different tax years. > Was there more than one 401(k) plan involved, and were > they employer plans or solo plans? There are a lot of > possibilities here. If the entire error is in a single solo plan > you might be able to re-characterize the contribution as a future > year contribution, depending on timing and on future-year > earnings. If so then you might avoid the entire impact of having > done this. > Steve makes a difference. Thanks, Gary -- << ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- > |
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#1
04-20-2009, 05:50 PM
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| Re: Tax Penalty for putting in too much in a 401K "Gary" wrote: - quote - > What is the Tax Penalty for putting in too much into a 401K ?
At worst double taxation of the excess. See Publication 525.-------------- Phil Marti, VITA Volunteer Clarksburg, MD -- << ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- > |
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04-20-2009, 05:38 PM
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| Re: Tax Penalty for putting in too much in a 401K Gary <ghorne2000[at]yahoo.com> wrote: - quote - > What is the Tax Penalty for putting in too much into a 401K ?
The plan could make a corrective distribution to you, whichis taxable. There should not be a penalty in the baseline case, but both the excess contribution amount, and the earnings on it, will be taxable, possibly in different tax years. Was there more than one 401(k) plan involved, and were they employer plans or solo plans? There are a lot of possibilities here. If the entire error is in a single solo plan you might be able to re-characterize the contribution as a future year contribution, depending on timing and on future-year earnings. If so then you might avoid the entire impact of having done this. Steve -- << ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- > |
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#-1
04-20-2009, 04:21 PM
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| Tax Penalty for putting in too much in a 401K What is the Tax Penalty for putting in too much into a 401K ? Does it work the same for a Roth IRA ? Thanks, Gary -- << ------------------------------------------------------- > << 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 (2007) - All rights reserved. > << ------------------------------------------------------- > |
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