beachmom wrote:Thanks for the help.
I did the math and realized I might not hit the Max even if I go with 100%. I can't change my contribution until July 1. Connya's comment is a concern but since I have only contributed 12 % of my pay so far the annual total won't be 100%. Negative paychecks after ss/ Medicare could be a problem.
I am not confident of my employer's ability to deal with an overage. HR told me today no one has ever maxed their contribution. It is a small young company.
I really do think they would handle the 17500 limit gracefully; this is very common, and your employer is doubtless using the same payroll provider or software that everyone else does.
I like the advice about writing myself a check every payday. I was a little worried how I would feel working and getting no immediate pay.
Yes, it is an interesting state of affairs. But don't think that you are getting no immediate pay. Rather, your pay is just going into your savings account instead of your checking account. Proof positive that you aren't living paycheck to paycheck. Good!
The lump sum is taxable but we have a large cost basis so I estimate my net taxable will be about $40000 to $50000. I will be calling my Cpa to see if we need to do anything like start quarterly tax payments.
I hope he's better than the various CPAs I have been through. I finally gave up on the lot of them
If he says that you must immediately send in a bunch of estimated taxes, do tell. It's probably not the only option.
Do ask him if you will push yourself into AMT with this lump sum. I don't think we can tell from the data presented, but if this does happen to hit you with AMT, holy bananas do you want to max out the 401(k), and probably do a few other things to squeak back out of AMT range if you can.