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    citylover's Avatar
    citylover Posts: 79, Reputation: 1
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    #1

    Jun 14, 2008, 06:39 PM
    401K deadline
    My company now allows us to deposit into a 401K pre-tax. Is Dec 31 the last day I can contribute or does it extend into April for the current tax year?
    ebaines's Avatar
    ebaines Posts: 12,131, Reputation: 1307
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    #2

    Jun 23, 2008, 06:05 AM
    Yes, December 31 is indeed the last day you can contribute for a particular tax year. Keep in mind that a 401(k) plan is a form of deferred compensation plan, and your contributions are deferred from your pay as you earn it. Hence if you receive a paycheck on December 31, 2008, any 401(k) contributions deducted from that paycheck are considered to be for tax year 2008; if you receive a pay check on January 1 2009 deductions will be considered as part of tax year 2009's contributions.
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