Dammit - I got an unexpected $3000 check in the mail | Page 3 | TigerDroppings.com
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cwill
New Orleans Saints Fan
Member since Jan 2005
27315 posts

re: Dammit - I got an unexpected $3000 check in the mail

Isn't there a certain level of income at which a Roth isn't an option? What is that $?


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Dusty Bottoms
LSU Fan
Guadalajara
Member since Nov 2006
818 posts

re: Dammit - I got an unexpected $3000 check in the mail
quote:

This is what happened. I put in 17.5 and was told that since my plan didn't have enough non-HCE contributions, I have to take some of it back as taxable income. Because it isn't fair.


What isn't fair is that people making more than and less than you can put in the full amount! You (and me) are in the sweet spot of the law. And, ironically, this is termed by Congress and the IRS as "non-discriminatory". I will quickly get bent out of shape if I dwell on this any longer...
This post was edited on 4/8 at 1:00 pm


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Dusty Bottoms
LSU Fan
Guadalajara
Member since Nov 2006
818 posts

re: Dammit - I got an unexpected $3000 check in the mail
quote:

I've been maxing my Roth for several years now.


You want to hear something really grandtastic? The fact that I couldn't contribute fully to my 401k raised my taxable income just enough that I am not eligible to contribute to a Roth IRA.



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Dusty Bottoms
LSU Fan
Guadalajara
Member since Nov 2006
818 posts

re: Dammit - I got an unexpected $3000 check in the mail
quote:

I guess I shouldn't complain about unexpectedly not being able to deduct on three thousand, but it still annoys me.


No, you should complain. It is an unfair, poorly thought out law that needs to be repealed. And it (1) limited your retirement savings, (2) increased your taxable income, most importantly (3) increased your tax liability $750-$1,000.


Dusty Bottoms
LSU Fan
Guadalajara
Member since Nov 2006
818 posts

re: Dammit - I got an unexpected $3000 check in the mail
In case I did not make my point clear, here is why this law sucks...

Let's say the HCE definition is $115,000 (it is adjusted annually, and this figure is probably a few years old now). Anyway, assume the limit for an HCE is 7.5% in this case, which is what it is for me. Below are compensation levels and the amount someone can contribute to 401k at that level:

<$114k === $17,500
$115k === $ 8,625
$150k === $11,250
$200k === $15,000
>$233k === $17,500

Those who ride just above the HCE limit get to really take it for the team.

This post was edited on 4/8 at 1:29 pm


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Dusty Bottoms
LSU Fan
Guadalajara
Member since Nov 2006
818 posts

re: Dammit - I got an unexpected $3000 check in the mail
quote:

Especially since its all their highly compensated / more important employees complaining.


Look at the chart above. It is NOT all highly compensated employees. Only those in a small range are affected.


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