401k+Backdoor Roth over contribution

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Topic Author
annu
Posts: 746
Joined: Mon Nov 04, 2019 7:55 pm

401k+Backdoor Roth over contribution

Post by annu » Sat Aug 01, 2020 1:01 pm

The limit for 2020 is 57000(thought was 57500) and did 57400. Wondering how much of hassle I will have to go through to deal with this along with not being able to finish off paying the Pretax 19500.

Also in my ignorance, since I contributed more after TAx, will not be hitting the 19500 limit of pre-tax after the year, am not sure if I can do something with me After tax contribution(I have in-plan roth conversion), so I can still finish the Annual 19500 amount for the year including Employer match, otherwise will be losing out on both Employer match(free money) and also Pretax contributions.

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FiveK
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Re: 401k+Backdoor Roth over contribution

Post by FiveK » Sat Aug 01, 2020 1:28 pm


Alan S.
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Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: 401k+Backdoor Roth over contribution

Post by Alan S. » Sat Aug 01, 2020 5:24 pm

If you exceeded the 415c limit and did an IRR to the designated Roth, the plan might use one of many corrective options based on the plan procedures, and based on the presence of any other violations (such as ACP) and plan forfeitures. To indicate just how many variables might be incorporated, see p 112 of the attached EPCRS plan correction Notice.

https://www.irs.gov/pub/irs-drop/rp-19-19.pdf

In short, you should contact the plan now and see what they come up with. Perhaps you will be able to complete your elective deferrals, and next year they will be able to return the excess amount to you from the designated Roth if they otherwise would have done so from your after tax contributions had you not done the IRR.

Topic Author
annu
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Joined: Mon Nov 04, 2019 7:55 pm

Re: 401k+Backdoor Roth over contribution

Post by annu » Sat Aug 01, 2020 6:35 pm

Alan S. wrote:
Sat Aug 01, 2020 5:24 pm
If you exceeded the 415c limit and did an IRR to the designated Roth, the plan might use one of many corrective options based on the plan procedures, and based on the presence of any other violations (such as ACP) and plan forfeitures. To indicate just how many variables might be incorporated, see p 112 of the attached EPCRS plan correction Notice.

https://www.irs.gov/pub/irs-drop/rp-19-19.pdf

In short, you should contact the plan now and see what they come up with. Perhaps you will be able to complete your elective deferrals, and next year they will be able to return the excess amount to you from the designated Roth if they otherwise would have done so from your after tax contributions had you not done the IRR.
Thanks Alan, they are available on Monday again, will talk to them

Topic Author
annu
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Re: 401k+Backdoor Roth over contribution

Post by annu » Sat Aug 01, 2020 6:39 pm

FiveK wrote:
Sat Aug 01, 2020 1:28 pm
Do you mean Backdoor Roth or Mega Backdoor Roth?
Fivek it is the MegaBackdoor. My employer offers after contribution and in plan conversion, so did that for 2020.

Missed to add an employer contribution of $3000 in January of this year, that also contributes to ky yearly limit and that exasperated the problem.

Kind of pissed at myself that will miss out on pretax and also employer match for rest of year.

Alan S.
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Location: Prescott, AZ

Re: 401k+Backdoor Roth over contribution

Post by Alan S. » Sat Aug 01, 2020 6:45 pm

Are you sure that 3000 employer contribution was not allocated to 2019?

Topic Author
annu
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Re: 401k+Backdoor Roth over contribution

Post by annu » Sat Aug 01, 2020 7:01 pm

It was given in january of 2020. I am sorry am assuming it will go to 2020. First rep I talked to at fidelity had told me it was for 2019, but she then connected to another person, who said it will go to 2020. So am not sure, but since my total contribution for 2020 includes that amount for 2020 at fidelity, I am assuming it is for 2020.

lakpr
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Re: 401k+Backdoor Roth over contribution

Post by lakpr » Sat Aug 01, 2020 7:18 pm

My employer also has the "true-up" of employer match to the 401k contributions, and it gets paid on the Jan-31 paycheck. But it always gets accounted for the previous year ...

@annu, you may be safe ...

Topic Author
annu
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Re: 401k+Backdoor Roth over contribution

Post by annu » Sat Aug 01, 2020 7:46 pm

lakpr wrote:
Sat Aug 01, 2020 7:18 pm
My employer also has the "true-up" of employer match to the 401k contributions, and it gets paid on the Jan-31 paycheck. But it always gets accounted for the previous year ...

@annu, you may be safe ...
Does that have something for box 13 in its title somewhere.
I will definitely talk to plan provider, as am really confused now, since I stopped all new contributions now.

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