Maximizing 401k, how to calculate limits

[faltoo]

How to calculate the of 401k 13K limit. If the moeny is deducted on 31st dec-03 and credited on 5th Jan04. This money will count towards 2003 limit or 2004 limit? Thanx

 

[malakito]

The only way to know for sure would be to contact your payroll department or person and ask them.

I know in my case I am paid on the 15th and the last of the month, and my December 31ish 401(k) contribution counts towards the earlier of the two years.

malakito.

 

[Tadpole]

Follow your W-2. In my job the first paycheck on mine is any money I RECEIVED in the year even if it is for work in the previous year. The last pay on my W-2 is the last money I received before Jan 1 of the next year. For my 401k, the same is true in the accounting on my paystub. I guess the IRS only cares when you got the money and not when you earned it.

 

[John Galt]

Re. "I guess the IRS only cares when you got the money", this is generally true for "cash basis taxpayers"
and probably completely accurate in the context of your post. However, I regret to inform you that there are
many exceptions to what would appear a simple rule.

John Galt