457 limits?

[rothlev]

I did the tax return of a teacher I counseled with him as to how to lower his taxes, he had lots of dividends, capital gains and income outside of the teaching job.

He was able to contribute the max 16500 at the time to both a 457 and a 403b plan because his district offered both. That effectively reduced his earned income to about 10k. If he had children and kept his money tax deferred , or not showing up on his tax return as interest or dividends, he could have qualifed for another $5600 or so in earned income credit.

[scrabbler1]

My friend contacted his payroll department and they confirmed he is eligible for catch-up contributions. But he hsa to fill out a separate form which means he will lose some time in beginning these additional contributions which seems somewhat unfair and inefficient. But he can have a greater percentage of his pay put toward the higher limit so that will offset the temporary shortfall due to his hitting the cap in the middle of his most recent paycheck. It will make for bumpy net pay until things straighten themselves out but he will be okay because we are well short of the end of the year.

Thank you to those who most recently replied.

[steelyman]

Quote:

Originally Posted by scrabbler1 My friend contacted his payroll department and they confirmed he is eligible for catch-up contributions. But he hsa to fill out a separate form which means he will lose some time in beginning these additional contributions which seems somewhat unfair and inefficient. But he can have a greater percentage of his pay put toward the higher limit so that will offset the temporary shortfall due to his hitting the cap in the middle of his most recent paycheck. It will make for bumpy net pay until things straighten themselves out but he will be okay because we are well short of the end of the year. Thank you to those who most recently replied.

That's good news!

I recall pay at the end there being variable, but I wanted to max the plans available to us (403 and 457). It was 2011, so it was $22K each. Our HR people also posted a notice that you could apply unused terminal benefits (vacation, sick time) to retirement plans, which I did. Yes, another form to fill out...