bssc
Moderator Emeritus
- Joined
- Dec 27, 2005
- Messages
- 10,125
My wife has been working overtime a lot the last couple of month. We had maxed out last year on our 401(k) contributions. When I went to add the additional 500 increase for this year (to 15,500), the system would not let me because she is now considered a highly compensated employee in 2006. There is not a lot we can do about it since she works for a Dow Component company with 300,000+ people.
I searched but didn't find anything specific to my question (but that doesn't mean it was there and I missed it). My questions are:
1) Since this took place in 2006 and we maxed out, what are the rules behind this? I am sure that we will hear from HR but they have messed her up before. If they return part of the contributions (probably $5000+), will I need to report this on our taxes in 2006 or 2007? If it was 2006 and we don't hear from HR, we will need to bug them.
2) How often do they calculate the threshold?
Needless to say, there are a lot more worse issues to have but I am lazy and don't want to have to submit a 1040X if I don't have to.
I searched but didn't find anything specific to my question (but that doesn't mean it was there and I missed it). My questions are:
1) Since this took place in 2006 and we maxed out, what are the rules behind this? I am sure that we will hear from HR but they have messed her up before. If they return part of the contributions (probably $5000+), will I need to report this on our taxes in 2006 or 2007? If it was 2006 and we don't hear from HR, we will need to bug them.
2) How often do they calculate the threshold?
Needless to say, there are a lot more worse issues to have but I am lazy and don't want to have to submit a 1040X if I don't have to.