401k - Did I over contribute?

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Vilgan
Posts: 144
Joined: Sun Dec 15, 2013 12:46 pm

401k - Did I over contribute?

Post by Vilgan » Wed Jan 28, 2015 5:38 pm

Hi all,

I had a quick question about something that is making me a bit nervous.

In 2014, my 401k deferral limit was the usual 17.5k which I hit partway through the year. Once I hit the 17.5k limit, payroll stopped sending any money to the 401k so that seemed to work great.

However, at the end of the year the date and timing ended up a bit funky. I was supposed to be paid on January 2, 2015 and that's what it says on my pay stub (1400 of which was marked as a 401k deferral). However, I actually received the money in my bank account/401k plan on Dec 31 2014. So technically does this mean that I might have contributed 17,500 + 1,400 in 2014?

What does the IRS care about? The pay date on the pay stub? Or when the money actually makes it into the 401k? Fidelity is also providing slightly misleading information now, since the summary of contributions for 2015 doesn't include the payment received on Dec 31, 2014 even though it was supposed to be for the 2015 year.

I would greatly appreciate some clarity from someone more familiar on how this works and if there is a problem that I need to be concerned about.

Thanks!

barnaclebob
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Joined: Thu Aug 09, 2012 10:54 am

Re: 401k - Did I over contribute?

Post by barnaclebob » Wed Jan 28, 2015 6:08 pm

What does your W-2 indicate? Does it show your taxable income reduced by the 1400 received on dec 31? If not then I assume you are ok for the 2014 tax year. You'll then need to make sure its booked correctly for 2015.

Vilgan
Posts: 144
Joined: Sun Dec 15, 2013 12:46 pm

Re: 401k - Did I over contribute?

Post by Vilgan » Wed Jan 28, 2015 6:52 pm

barnaclebob wrote:What does your W-2 indicate? Does it show your taxable income reduced by the 1400 received on dec 31? If not then I assume you are ok for the 2014 tax year. You'll then need to make sure its booked correctly for 2015.


W2 just shows the 17500. As far as payroll is concerned, I wasn't paid until 2015. The fact that I received the money in 2014 concerned me a bit.

Dovahkiin
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Joined: Thu Jan 26, 2012 11:36 pm

Re: 401k - Did I over contribute?

Post by Dovahkiin » Wed Jan 28, 2015 9:19 pm

I'm not a tax professional but I wouldn't worry about it since your 2014 W2 doesn't show it, it means that your 2015 W2 will. Companies can also pick particular accounting methods that are based off the recorded date (your paycheck date for instance) and not the physical date the transaction actually happened. Likely your company uses this accounting method and so you and them will be fine.

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tyler_cracker
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Re: 401k - Did I over contribute?

Post by tyler_cracker » Thu Jan 29, 2015 1:05 am

fwiw i had the opposite problem in 2012 (last contribution of the year cleared in early january 2013). all the tax forms showed it correctly and the irs never yelled at me. i agree with the dragonborn that you're probably fine.

Vilgan
Posts: 144
Joined: Sun Dec 15, 2013 12:46 pm

Re: 401k - Did I over contribute?

Post by Vilgan » Thu Jan 29, 2015 12:51 pm

tyler_cracker wrote:fwiw i had the opposite problem in 2012 (last contribution of the year cleared in early january 2013). all the tax forms showed it correctly and the irs never yelled at me. i agree with the dragonborn that you're probably fine.


Great, thanks for the confirmation!

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