Need some 401k/tax/payroll help

[Jackburton]

I'll know for sure Monday but this is what it's looking like. I already get reduced tax credits because of my earnings, this is just insult to injury, I worked my ass off to make as much as I did and now it seems I'm an evil rich man that doesn't deserve the opportunity to save money.

 

[Brownslave688]

Under the HCE, yes.

That's insane.


Looks like your punished for making too much and saving too much.

 

[Brownslave688]

I'll know for sure Monday but this is what it's looking like. I already get reduced tax credits because of my earnings, this is just insult to injury, I worked my ass off to make as much as I did and now it seems I'm an evil rich man that doesn't deserve the opportunity to save money.

I don't agree with the premise but I really don't agree with the income limit.


115k ? Really?

 

[UpstateNYUPSer(Ret)]

Plus having to wait on hold forever before you can talk to a live rep. Worse this time of year also with so many other people calling.

Their customer service is actually very good and hold times are minimal.

 

[Jackburton]

I don't agree with the premise but I really don't agree with the income limit.


115k ? Really?

The problem is UPS does pension contributions already, other companies entice their employees with 401k matches, on top of that, we have a very large PT work force. I can see how the desire to participate in a 401k program at UPS would be low on priorities. Don't get me started on the lack of funds to choose from comparatively.

In terms of the limits, I made more than 115k in 2014 and didn't face this problem, it was 123k to be exact. Not sure if the limits were raised since the publication of this article, but last year I topped out at 127k. It seems that it can be a dollar limit or a percentage (twenty I believe) that the company has to adopt, wish Hoax would chime in.

 

[olroadbeech]

Going to try and make this as simple as possible. I was reviewing my 401k and noticed Prudential took about 4K spread over my investments and moved it from pretax to after tax, not to be confused with Roth. I had contributed the max, 18k last year with about 3/4 into pretax and 1/4 into Roth. I've already done my taxes for the year and can't figure out why they would move money like this, it's never happened to me before. This transaction took place on 3/14, and just recatagorized it from pretax to after tax, pulling from the investments in the % that was contributed then re investing back in. This is the only time I've ever had anything like this and have been maxing out my 401k to the limit every year.

I contacted Prudential Teamsters 401k but they aren't open till Monday and I'm concerned I'll have to do an amended return if I have to pay tax on the money they moved in order to make it really after tax money.

Any ideas?

you'll have to call them.

 

[olroadbeech]

I'll know for sure Monday but this is what it's looking like. I already get reduced tax credits because of my earnings, this is just insult to injury, I worked my ass off to make as much as I did and now it seems I'm an evil rich man that doesn't deserve the opportunity to save money.

we were feeling the same way last year. i paid over 15k in taxes even though we maxed out 401k and IRA's since my spouse does not work .

only worked 6 months in 2015 then retired and my refund doubled.

being fully retired in 2016 we will probably get much more because of age and credits for retirement savings etc.

you are right about being punished for working hard. it's bass awkwards in this country.

 

[Mugarolla]

STFU so you're punished for saving more than other people?

You're not punished for saving more than other people. But, if you're an HCE, your tax breaks are limited on a 401K more than non HCE. There are other ways to save.

You make a lot of money. The government doesn't see a need to give you a huge tax break.

 

[Ms.PacMan]

I do a post tax 401k. It basically a glorified savings account. I can take it out at any time and only have to pay taxes on any interested I may have earned.

You can roll after tax 401k contributions into a Roth IRA (like at Vanguard). http://www.bankrate.com/finance/retirement/after-tax-401k-rollover-to-roth-ira-rules.aspx

Jack - Same goes for you.

 

[By The Book]

The problem I'm seeing is that if they moved pretax money into that after tax category, taxes will be owed on that money, including any growth, for tax year 2015. Intrestinv part is they only took from the pretax, not from my Roth portion I contributed during the year.

It looks like a wash to me if they moved the money they took from your pretax to your after tax and put it back into your pretax if that makes sense. The dollar amounts are exactly the same(on your statements).

 

[Ms.PacMan]

@Jackburton You will owe tax only if it changes the amount of tax due on your adj.gross income. 127-14 vs. 127-18

Gains on anything after tax are like stocks you buy in a brokerage account, no gain or loss until sold.

 

[Brownslave688]

You're not punished for saving more than other people. But, if you're an HCE, your tax breaks are limited on a 401K more than non HCE. There are other ways to save.

You make a lot of money. The government doesn't see a need to give you a huge tax break.

You're punished.


Don't try to church it up dirt

 

[Jackburton]

You can roll after tax 401k contributions into a Roth IRA (like at Vanguard). http://www.bankrate.com/finance/retirement/after-tax-401k-rollover-to-roth-ira-rules.aspx

Jack - Same goes for you.

The problem is if the amounts had initially went into an after tax 401k I'd agree. They took money from the pretax portion and moved it over into the after tax category. When filing my taxes I reported the pretax contribution amount, now they have changed that, this is where I'm having issues at. One option I was thinking about is moving it to a traditional tax deferred IRA but I don't need another account to maintain.

 

[IVE GOTTA PACKAGE 4U]

The problem is if the amounts had initially went into an after tax 401k I'd agree. They took money from the pretax portion and moved it over into the after tax category. When filing my taxes I reported the pretax corrobution amount, now they have changed that, this is where I'm having issues at. One option I was thinking about is moving it to a traditional tax deferred IRA but I don't need another account to maintain.

You make too much money for a traditional IRA.

 

[Jackburton]

You make too much money for a traditional IRA.

There aren't limits on IRA contributions, besides the 5500.00 under age limit. There's a limit to ROTH IRA but I'm under that also.

 

[IVE GOTTA PACKAGE 4U]

There aren't limits on IRA contributions, there's a limit to ROTH IRA but I'm under that also.

Yes their is because you are covered under a pension plan.

 

[IVE GOTTA PACKAGE 4U]

https://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

 

[Jackburton]

It looks like a wash to me if they moved the money they took from your pretax to your after tax and put it back into your pretax if that makes sense. The dollar amounts are exactly the same(on your statements).

They moved it from pretax and went to after tax, it never went back to after tax.

 

[Jackburton]

Yes their is because you are covered under a pension plan.

I'll look at that but it's based off of MAGI, another reason I don't want to start up another retirement account, I'll probably just add it to my TDA account.

 

[IVE GOTTA PACKAGE 4U]

I'll look at that but it's based off of MAGI, another reason I don't want to start up another retirement account, I'll probably just add it to my TDA account.

Another thought. Lower you pre-tax 401k and open up a Roth IRA for you and the Mrs.