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42 votes
Accepted

Could my employer match contribution have caused me to have an excess 401K contribution?

The limit of $19,500 (plus an additional $6,500 for those 50 and over, for a total of $26,000) only applies to employee pre-tax contributions to Traditional 401(k) and employee contributions to Roth ...
user102008's user avatar
  • 17.3k
36 votes

What happens if you violate an IRS limit by less than 50 cents?

I don't know the answer to your question. But let me offer these thoughts: First, when it comes to over contributing to an HSA, you cannot just "pay the penalty" and be done with it, ...
Ben Miller's user avatar
  • 116k
17 votes

Why is my 401k manager recommending me to save more?

No one at fidelity told you to save more. Some poorly coded notification system suggested you save a higher percentage of your income with no consideration that your current election is taking you ...
quid's user avatar
  • 49k
15 votes

What happens if you violate an IRS limit by less than 50 cents?

What's going to happen if I just ignore this? Will someone eventually come after me for taxes, penalties and interest due on my overcontribution of 8¢? I expect nothing. If all your numbers on the ...
littleadv's user avatar
  • 177k
12 votes
Accepted

Why are excess HSA/IRA/401k/etc contributions allowed?

Some institutions enforce the limits, some don’t. However, one aspect that you may not realize is that they really don’t know what your contribution limits are. Lots of things affect your contribution ...
Ben Miller's user avatar
  • 116k
8 votes

Applying Roth IRA excess to next year

TL-DR: Remove one of the contributions (and all earnings therefrom) for 2017 by December 31, 2017. Don't wait till after the New Year to tell the IRA custodian to count it as a 2018 contribution. You ...
Dilip Sarwate's user avatar
7 votes

Why is my 401k manager recommending me to save more?

You didn't mention how old you are, which may be a factor, but as you observe you are already contributing the maximum you can to a 401(k) (or at least close to it). Most retirement systems have some ...
D Stanley's user avatar
  • 137k
7 votes

Past employer wants to sue for over contribution on their part to my HSA. years 2017 and 2018 can they do this?

Anyone can sue for any reason, so technically yes they can sue. The only thing that they might run up against is a statute of limitations, but that would be state dependent and you did not specify ...
Pete B.'s user avatar
  • 76.7k
7 votes

What happens to the company match for a 401k over-contribution?

The first employer matching contribution gets taken back. You don't want to mess around with over contributions like this. In addition to withdrawing over contributions, they withdraw some portion ...
minou's user avatar
  • 7,536
6 votes
Accepted

How are contribution limits enforced on Roth IRAs for people with high income?

It is enforced long before distribution time. By May 31st of each year the trustee sends a copy of IRS form 5498 to you, they also send a copy to the IRS. This form tells the IRS that you made an ...
mhoran_psprep's user avatar
5 votes

Best Option to Fix IRA Contributions and Do I Need to Do Tax amendments for Previous Years

talked to Turbotax agents and a private CPA on what is the best plan to fix all of that, but I got different advice It would help us helping you to know what was that "different advice" ...
littleadv's user avatar
  • 177k
4 votes
Accepted

I'm over the MAGI limit for 2018 for the Roth IRA I already contributed to. Now what?

I did this myself a few years ago. Best path forward is to call your financial institution managing your Roth and let them know (Vanguard helped me sort out my over-contribution). You'll need to ...
jaypops96's user avatar
  • 385
4 votes
Accepted

Roth IRA excess contribution removal infinite loop?

I found a forum post on the Intuit website that confirmed what I learned here and in some other places. Thanks all for the feedback and input. The gist of it is: Yes, the earnings on the withdrawn ...
aggieTaxes's user avatar
4 votes
Accepted

Roth IRA excess contribution to pay bank fees

Your best bet is to remove the excess contribution. Your broker should have forms to do that. There is a 6% tax on the excess contributions for each year that it remains uncorrected. It would be ...
NL - Apologize to Monica's user avatar
4 votes
Accepted

Does removing excess Roth IRA contribution reduce amount contributed?

You do not need to withdraw, you can recharacterize your contribution as a Traditional IRA then roll it over to a Roth. Contact the brokerage. Source: https://investor.vanguard.com/ira/ira-...
eithel's user avatar
  • 56
4 votes
Accepted

Correcting an ineligible contribution to a Roth IRA

I understand that I'm supposed to remove all earnings attributable to this ineligible contribution--is there a formula for computing this? That's if you withdraw (aka remove or correct) the excess ...
dave_thompson_085's user avatar
4 votes

Why are excess HSA/IRA/401k/etc contributions allowed?

Why are excess HSA/IRA/401k/etc contributions allowed? Sometimes they aren't allowed, e.g. Vanguard makes sure that the customers don't over-contribute to IRAs: So it depends on how good/bad your ...
Franck Dernoncourt's user avatar
3 votes

Excess Roth IRA Contributions calculation?

Neardupe Where to enter earnings income when correcting excess Roth IRA contributions? (which I just updated). How much to withdraw? .... Is this right? It looks right to me, but when you ...
dave_thompson_085's user avatar
3 votes

Excess HSA Contributions Used For Medical Expenses

Calling this "strange" is an understatement. I'd call it illegal. You can't pay healthcare premiums with HSA funds while you are employed (unless you are on COBRA), and if you over contribute you pay ...
TTT's user avatar
  • 47.2k
3 votes

Intentionally paying tax on 401K excess contributions to take advantage of employer matching?

First off, the 6% excise tax only applies to IRAs, and also applies every year the over contribution is in the account, until you correct it. Since you're talking about a 401k, this does not apply. [...
Nosjack's user avatar
  • 8,787
3 votes

Excess contribution to RRSP

1% of your overcontribution will be paid in penalties per month. It's not just a one-time penalty. That continues until you correct the problem by withdrawing to reduce the overcontribution or until ...
ChrisInEdmonton's user avatar
3 votes

How do I reverse an excess 401K Contribution?

You contact the custodian and ask for an excess contribution withdrawal. However, there's a decent chance that the custodian will refuse, since you have not in fact contributed in excess. I know of ...
littleadv's user avatar
  • 177k
2 votes
Accepted

HSA low balance options - $15 yearly fee vs yearly 6% Excise Tax ($9) vs?

Contributing the $150 to put you over the $3k mark is somewhat pointless. The reason is that, although you won't be accumulating any fees, you won't be able to use the money, either, because as soon ...
Ben Miller's user avatar
  • 116k
2 votes

HSA Employer Excess Contribution: W2 vs Other Income?

The instructions for IRS Form 8889 Line #13 Form 8889, Health Savings Accounts (HSAs) indicate that you should report the excess contributions as other income and that you should also report on IRS ...
Istanari's user avatar
  • 2,131
2 votes

How do you correct an excess Roth IRA contribution after the October 15th deadline?

Adding my own answer with info from Vanguard*. Clearly this is not a well understood topic since both answer so far are wrong. After the tax filing season in the year the contribution was made hast ...
cmcginty's user avatar
  • 206
2 votes
Accepted

Why is my 401k manager recommending me to save more?

From the excerpt you posted: Contributing the suggested 15%† or more? This makes it pretty clear that they simply have a rule that people contribute 15% or more. It's obviously a silly rule in ...
Brythan's user avatar
  • 21k
2 votes

How does the IRS handle 401k excess contributions with employer match?

A couple of observations: If the paycheck has a date on January 2018 then the salary, 401K, and contribution from the company are for 2018. Some companies auto enroll their employees into the 401K. ...
mhoran_psprep's user avatar
2 votes

I have some money left

what can I do with this money? Save it and pay fur future periods. Assuming you can eat and live without it, the best thing you can do is save it until you get through school (avoiding loans as much ...
D Stanley's user avatar
  • 137k
2 votes

Why is my 401k manager recommending me to save more?

It is virtually certain that the reason your investment manager is encouraging you to invest more is because he will make more money if you do. He may have targets to meet and your additional ...
DJClayworth's user avatar
  • 33.6k

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