My wife started a new job very late in 2015. She signed up for the retirement plan, a 403b plan and contributed approximately $200. Now doing our taxes, (married, filing jointly) we find we cannot contribute to our IRA's since she was covered by a retirement plan in 2015 and we are over income limits. So for $200 in a 403b we are now looking at close to $4000 extra in taxes since we can't contribute to IRA's. Is there any way to rescind a contribution after the fact to a 403b or 401k type plan? Having money held from one paycheck hardly counts as being covered by a retirement plan in my book!
Having money held from one paycheck hardly counts as being covered by a retirement plan in my book!
It's not your book that counts, it's the Congress' book called the Internal Revenue Code.
No, you cannot rescind a contribution after the fact. Maybe during the year you can do something with employer balancing it out, but not after the year is closed. (That, by the way, is different for IRAs where you can actually do re-characterization until the tax day of the next year)