Dammit - I got an unexpected $3000 check in the mail | TigerDroppings.com

Posted byMessage
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30538 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.







Back to top
Share:
soccerfüt
Oral Roberts Fan
& Expertly Using My
Member since May 2013
4380 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.






Back to top
  Replies (0)
TheIndulger
LSU Fan
Member since Sep 2011
11412 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?





Back to top
LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
1484 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.






Back to top
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30538 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.






Back to top
VABuckeye
Ohio State Fan
Oak Hill, VA
Member since Dec 2007
11930 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.





Back to top
  Replies (0)
ZereauxSum
LSU Fan
Lot 23E
Member since Nov 2008
9421 posts
 Online 

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


Back to top
  Replies (0)
RebelOP
Ole Miss Fan
Misty Mountain Top
Member since Jun 2013
11053 posts

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


So open an IRA





Back to top
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30538 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.






Back to top
jlu03
LSU Fan
Thibodaux
Member since Jul 2012
521 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


Back to top
  Replies (0)
LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
84465 posts

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


Roth it?





Back to top
The Easter Bunny
Georgia Tech Fan
Minneapolis, MN
Member since Jan 2005
42456 posts

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





Back to top
reb13
Ole Miss Fan
Oxford, MS
Member since May 2010
10095 posts

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


I'm assuming this only happens in smaller companies?





Back to top
LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
1484 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.






Back to top
  Replies (0)
nelatf
Louisiana Tech Fan
NELA
Member since Jan 2011
1379 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.






Back to top
ell_13
USA Fan
Alex Box
Member since Apr 2013
26502 posts

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.





Back to top
  Replies (0)
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30538 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.






Back to top
Smalls
LSU Fan
The South
Member since Jul 2009
4014 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?






Back to top
foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
30538 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.






Back to top
Smalls
LSU Fan
The South
Member since Jul 2009
4014 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


Back to top


Back to top