Jackburton
Gone Fish'n
Thanks for the info, never knew being covered under a pension plan affected that. Then again, I haven't opened an outside IRA, just my straight investment ones.
Need some 401k/tax/payroll help
- Thread starter Jackburton
- Start date
I only do pre-tax in my 401k
I have a Roth IRA for my wife and myself.
Jackburton
Gone Fish'n
Last year was the only year I was adding more to my pretax, past 3-4 years have been all ROTH contributions. I changed it back to ROTH contributions solely because it wasn't that big of a difference on the paycheck. As far as I know in order to have a ROTH contribution you have to have made an income, wife doesn't work outside the home.
She doesn't have to have income, as long as you have income.
Plus it's good to have some money in her name.
Mugarolla
Light 'em up!
It has always been that way.
The poor get better tax breaks than the rich. The rich just find creative ways to hide their money or to not pay tax on it.
The government wants the rich to pay their "fair" share by limiting the tax breaks on the rich. Limiting the tax breaks on a 401k is one way. Uncle Sam wants your money now.
A 401k is two-fold. Not only does it save money for retirement, it also gives you a tax break right now. Your 401k is pre-tax.
The Democrats say no, we want your tax money now.
So, you are not punished for saving, you are just so rich, according to the Democrats, that you do not need a tax break. Save all you want, but it will be after tax money.
The poor need the tax breaks so that they can save a little for retirement. You are not being punished, the poor are just being helped.
Welcome to the Socialist-Democratic Party. Just wait to see what happens is Clinton or Sanders gets elected. They will want even more of your money.
Brownslave688
You want a toe? I can get you a toe.
Well sanders doesn't stand a chance so that's moot.
And it's pretty freaking comical that 115k is considered rich.
Mugarolla
Light 'em up!
Sanders has a long shot. It is still possible that the FBI may indict Clinton. The FBI did find classified emails on her personal server. That is illegal and punishable by prison.
I won't get into all that, but it still leaves Sanders as a long shot.
As to being rich, maybe not, but you are classifed as an HCE. A highly compensated employee who is not entitled to the same tax breaks as the poor.
The point is that you are not being punished per se. You just don't get the same tax breaks as the poor. The government doesn't think you need, or deserve, them based on your income.
By The Book
Well-Known Member
In earlier posts I think you said you did nothing with your money(they moved it without letting you know), and this post says( I changed it back to ROTH). Maybe you forgot and it was a maximum amount to the pretax and a rebalancing thing if you're doing that? My question is do you get a good chunk back in taxes? Good news is you'll know what happened on Monday. I don't think that the 401k place sends anything to the IRS., unless you take monies out. Your paycheck may show this $2695.00 amout going into your pretax....which you used to reduce your taxable income, which shouldn't affect you because you didn't take any monies out.
Jackburton
Gone Fish'n
When I said I changed it back to Roth I meant my contribution level went from 20% pretax to 20% Roth, the change doesn't effect any money retroactively, just future contributions for the year. The limit of 18k was reached by a combination of pretax and Roth money, the limit doesn't care if it's either or, hence why saving into a Roth you actually save more as its after tax money. The taxable income will be effected as on your AGI is effected by the pretax amount.
I'm curious to what answer they are going to give you .
Jackburton
Gone Fish'n
Just got off the phone for 30 minutes, they didn't have an answer. Told me they'll get back to me within 3 business days. The rep spoke to the contribution and investment allocation dept, no one could answer why it was moved.
oldngray
nowhere special
No surprise there. Those places have awful customer service most of the time. The person answering the phone is probably someone in India who has nothing to do with actual investments.
Good luck brother.
UpstateNYUPSer(Ret)
Well-Known Member
Prudential has above average US based customer service.
By The Book
Well-Known Member
Did you get a chunk back on taxes.....was a question I asked of you. Just curious.
Jackburton
Gone Fish'n
I got back around 1500 fed 600 state.
Jackburton
Gone Fish'n
Ok, so I called back after later today and got another customer rep. These reps are a go between actual plan managers in different depts. I was placed on hold for about 2-4 minutes while they relayed questions back and forth. After verifying info I was told I was mailed a letter explaining what was done today /boggle. She explained that the Teamster plan failed the non discriminatory test which was indeed the same thing as the HCE test. I inquired was management taken into the account when determining the threshold, she explained since they are on a different plan, no. Basically, only hourlies are considered into the formulation for 401k participation.
I further inquired about the limitations of the income and contribution, she explained the test is performed in the first quarter of the year. Because of this, the overage that was recatagorized will be taxed for the 2016 as "carryover income" and on the 1099 I get, will be under 5500 reporting code on the 1099. I was also told I would not be charged 10% for pulling the overage out. I then decided to have make a check made out in the amount of the overage. I was told a minimum of 20% will be withheld and had the option of no state tax withheld and I could pay it when doing 2016 taxes in 2017. I'll just throw it into my TDAmeritrade account as leaving it in the 401k account does nothing that I couldn't do better in my non restricted trading/investing account.
If you have any questions let me know, I should be receiving the letter in the coming days. Hope this helps anyone in the same predicament and maybe pass this on to anyone that might have the same circumstances.
https://www.irs.gov/Retirement-Plan...-The-401k-ADP-and-ACP-Nondiscrimination-Tests
I further inquired about the limitations of the income and contribution, she explained the test is performed in the first quarter of the year. Because of this, the overage that was recatagorized will be taxed for the 2016 as "carryover income" and on the 1099 I get, will be under 5500 reporting code on the 1099. I was also told I would not be charged 10% for pulling the overage out. I then decided to have make a check made out in the amount of the overage. I was told a minimum of 20% will be withheld and had the option of no state tax withheld and I could pay it when doing 2016 taxes in 2017. I'll just throw it into my TDAmeritrade account as leaving it in the 401k account does nothing that I couldn't do better in my non restricted trading/investing account.
If you have any questions let me know, I should be receiving the letter in the coming days. Hope this helps anyone in the same predicament and maybe pass this on to anyone that might have the same circumstances.
https://www.irs.gov/Retirement-Plan...-The-401k-ADP-and-ACP-Nondiscrimination-Tests
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Sounds like a giant pain in the ass.
By The Book
Well-Known Member
See what happens when you make too much money......you follow their rules and find out this crap later! You may be in the 1% that has this problem. You seem to be taking it in stride though. I would blow a gasket.
retiredbrown
New Member
Call and explain you problem, they answer the phones fairly quick
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