Dammit - I got an unexpected $3000 check in the mail | TigerDroppings.com
Posted by
Message
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31267 posts

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

It seems I am a "highly compensated employee" and about 3K is being returned to me out of contributions I made to my 401(k) last year. Apparently if not enough po' folk contribute to their plan us ballers can't contribute as much either. Now I get to pay taxes on this.

That's right. Because others didn't contribute "enough" to their retirement savings now I can't either. God Bless America.


soccerfüt
Oral Roberts Fan
& Expertly Using My
Member since May 2013
6754 posts
Online

re: Dammit - I got an unexpected $3000 check in the mail
You gotta mind your own store, I always take stock of this issue towards the end of each CY.

I over-contributed once to a company-sponsored 401k plan. I will not do that again.


Replies (0)
Replies (0)
TheIndulger
LSU Fan
Member since Sep 2011
12607 posts

re: Dammit - I got an unexpected $3000 check in the mail
I don't get it. So even though the limit to contribute is 17,500, they only let you put in 14,500?


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
2299 posts

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

I don't get it. So even though the limit to contribute is 17,500, they only let you put in 14,500?


401(k) plans have to undergo testing. Without getting too inside baseball, if the percentage of salary put in by "highly compensated employees" is much higher than the percentage of salary put in by everyone else, then the limit for the highly compensated employees is drug down.

There's a way around this. You can skip testing if the company puts in a minimum amount. There are a couple of options.


foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31267 posts

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

401(k) plans have to undergo testing. Without getting too inside baseball, if the percentage of salary put in by "highly compensated employees" is much higher than the percentage of salary put in by everyone else, then the limit for the highly compensated employees is drug down.


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.


VABuckeye
Ohio State Fan
Oak Hill, VA
Member since Dec 2007
12969 posts

re: Dammit - I got an unexpected $3000 check in the mail
This is one of the reasons why I have my own company and I limit the size.


Replies (0)
Replies (0)
ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
10176 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.


I'm pretty sure I'm not a HCE but this sounds like some bullshitee. I didn't know that a plan could do this. I'd be a little peeved too.

How on earth does someone else's contributions to the plan hurt me? If anything, it makes it bigger which is good for me down the road isn't it?
This post was edited on 4/5 at 8:32 pm


Replies (0)
Replies (0)
RebelOP
Ole Miss Fan
Misty Mountain Top
Member since Jun 2013
11197 posts
Online

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


foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31267 posts

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

So open an IRA


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


jlu03
LSU Fan
Thibodaux
Member since Jul 2012
817 posts
Online

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

It seems I am a "highly compensated employee" and about 3K is being returned to me out of contributions I made to my 401(k) last year. Apparently if not enough po' folk contribute to their plan us ballers can't contribute as much either. Now I get to pay taxes on this.



Just wire the money to my bank account and you can call it a donation on your taxes....Problem Solved.


But seriously, that's bull shite.
This post was edited on 4/5 at 9:52 pm


Replies (0)
Replies (0)
LSURussian
LSU Fan
Member since Feb 2005
85143 posts

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


The Easter Bunny
Georgia Tech Fan
Member since Jan 2005
42588 posts
Online

re: Dammit - I got an unexpected $3000 check in the mail
When I started my current job last year they informed me this was a possibility since I'm a HCE. fricking ridiculous, and I don't know what I'd do in your situation. My wife and I have maxed our Roths since we've been married


reb13
Ole Miss Fan
Oxford, MS
Member since May 2010
10186 posts

re: Dammit - I got an unexpected $3000 check in the mail
I'm assuming this only happens in smaller companies?


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
2299 posts

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

I'm assuming this only happens in smaller companies?


That's probably part of it, but it usually has more to do with companies that have a big pay gap between the owners/high managers and the staff.

I have several clients in the hotel/tourism business, and this is a problem just about every single year. The companies offer matches to the employees, but the employees don't really particpate, mainly because they can't afford to.


Replies (0)
Replies (0)
nelatf
Louisiana Tech Fan
NELA
Member since Jan 2011
1528 posts

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

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


You are not really an OT baller until you pass the Roth IRA income limits.


ell_13
USA Fan
Member since Apr 2013
30932 posts
Online

re: Dammit - I got an unexpected $3000 check in the mail
OT Ballers aren't concerned with things like limits. They know how to avoid those regardless of income.


Replies (0)
Replies (0)
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31267 posts

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

I'm assuming this only happens in smaller companies?


My employer has annual revenues in the billions of dollars.


Smalls
LSU Fan
The South
Member since Jul 2009
4957 posts

re: Dammit - I got an unexpected $3000 check in the mail
College savings for the kids?
Max out the HSA if you have one?


foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
31267 posts

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

College savings for the kids?

No kids.
quote:

Max out the HSA if you have one?

Already done.

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


Smalls
LSU Fan
The South
Member since Jul 2009
4957 posts

re: Dammit - I got an unexpected $3000 check in the mail
Take the SO on an unexpected weekend getaway?

What general line of work are you in, BTW?
This post was edited on 4/6 at 9:50 am


Page 1 of 3

Back to top

Follow TigerDroppings for LSU Football News
Follow us on Twitter, Facebook and Instagram to get the latest updates on LSU Football and Recruiting.

FacebookTwitterInstagram