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Dammit - I got an unexpected $3000 check in the mail
Posted on 4/5/14 at 6:15 pm
Posted on 4/5/14 at 6:15 pm
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.
That's right. Because others didn't contribute "enough" to their retirement savings now I can't either. God Bless America.
Posted on 4/5/14 at 6:21 pm to foshizzle
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.
I over-contributed once to a company-sponsored 401k plan. I will not do that again.
Posted on 4/5/14 at 6:28 pm to foshizzle
I don't get it. So even though the limit to contribute is 17,500, they only let you put in 14,500?
Posted on 4/5/14 at 6:46 pm to TheIndulger
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.
Posted on 4/5/14 at 7:02 pm to LSUFanHouston
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.
Posted on 4/5/14 at 7:54 pm to foshizzle
This is one of the reasons why I have my own company and I limit the size.
Posted on 4/5/14 at 8:23 pm to foshizzle
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 bullshite. 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 4/5/14 at 8:32 pm
Posted on 4/5/14 at 9:30 pm to RebelOP
quote:
So open an IRA
I've been maxing my Roth for several years now.
Posted on 4/5/14 at 9:50 pm to foshizzle
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 bullshite.
This post was edited on 4/5/14 at 9:52 pm
Posted on 4/5/14 at 10:43 pm to foshizzle
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
Posted on 4/5/14 at 10:50 pm to The Easter Bunny
I'm assuming this only happens in smaller companies?
Posted on 4/5/14 at 11:11 pm to reb13
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.
Posted on 4/6/14 at 8:56 am to foshizzle
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.
Posted on 4/6/14 at 9:16 am to nelatf
OT Ballers aren't concerned with things like limits. They know how to avoid those regardless of income.
Posted on 4/6/14 at 9:22 am to reb13
quote:
I'm assuming this only happens in smaller companies?
My employer has annual revenues in the billions of dollars.
Posted on 4/6/14 at 9:30 am to foshizzle
College savings for the kids?
Max out the HSA if you have one?
Max out the HSA if you have one?
Posted on 4/6/14 at 9:43 am to Smalls
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.
Posted on 4/6/14 at 9:48 am to foshizzle
Take the SO on an unexpected weekend getaway?
What general line of work are you in, BTW?
What general line of work are you in, BTW?
This post was edited on 4/6/14 at 9:50 am
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