Ask Experts Questions for FREE Help!
  Advanced
Register  |  Log in  
   Ask    
 Answer  
  Help  

Ask QuestionsprogressAnswer QuestionsprogressBuild ReputationprogressBecome an Expert
 
Free Answers in 3 Easy Steps

Register Now
3 Steps

At Ask Me Help Desk you can ask questions in any topic and have them answered for free by our experts. To ask questions or participate in answering them you must register for a free account. By registering you will be able to:
  • Get free answers from experts in any of our 300+ topics.
  • Accept money for answers that you provide.
  • Communicate privately with other members (PM).
  • See fewer ads.

Home > Money & Services > Investing   »   Excess Contribution in 401k plan

 
Question Tools Search this Question Display Modes
Question
 
 
#1  
Old May 11, 2007, 09:31 AM
sunilagrawal5
New Member
sunilagrawal5 is offline
 
Join Date: May 2007
Posts: 1
sunilagrawal5 See this member's comment history on his/her Profile page.
Excess Contribution in 401k plan

What does the term excess contribution mean?

Reply With Quote
 
     

Answers
 
 
Old May 11, 2007, 12:30 PM   #2  
AtlantaTaxExpert
Tax Expert
AtlantaTaxExpert is offline
 
Join Date: Feb 2005
Location: Atlanta, Georgia
Posts: 9,706
AtlantaTaxExpert See this member's comment history on his/her Profile page.AtlantaTaxExpert See this member's comment history on his/her Profile page.AtlantaTaxExpert See this member's comment history on his/her Profile page.
The maximum amount you can contribute to a 401K is (I believe) 15% of your wages or $15,000, which ever is less. If you contribute more, that is an "excess contribution".

It normally happens when you change jobs in the calendar year. If you have ONE job, the 401K custodian knows to NOT allow you to contribute an excess amount to the 401K. However, after a job change, the 401K custodian has no way of knowing what was contributed in the earlier job.

Had this happen to a client. He was NOT happy when the 6% excise tax was levied on the excess contribution.
  Reply With Quote
 
     


Question Tools Search this Question
Search this Question:

Advanced Search
Display Modes

 
Similar Sponsors

Similar Questions
Question Asker Topic Answers Last Post
Retirement plan contribution colin1980 Retirement 7 Mar 5, 2007 02:48 PM
401k excess deferral and penalty sunder244 Taxes 3 Dec 5, 2006 08:29 PM
How to get interest from 401K plan if under 59? swansonplace Investing 3 Jun 9, 2006 07:15 AM
My new employer has no 401k plan ptgo Retirement 1 Sep 29, 2005 02:59 PM
401K Contribution Timing bfrhou Retirement 2 Aug 25, 2005 08:53 AM




Copyright ©2003 - 2007, Ask Me Help Desk.
All times are GMT -8. The time now is 09:42 PM.

Content Relevant URLs by vBSEO 3.0.0 RC6 © 2006, Crawlability, Inc.