401k Maximum Contribution

[mark_1]

Simple Question...I understand I can contribute up to $17,500 to my 401k in 2014. Is this $17,500 pre-tax from my paycheck only or does it include company match and profit sharing that is deposited to 401k? I assume it is just my paycheck.

Also, what happens if I choose a percentage of my check that would contribute more than $17,500 for the year? Am I notified somehow?

[cardtrick]

Simple Question...I understand I can contribute up to $17,500 to my 401k in 2014. Is this $17,500 pre-tax from my paycheck only or does it include company match and profit sharing that is deposited to 401k? I assume it is just my paycheck.

Also, what happens if I choose a percentage of my check that would contribute more than $17,500 for the year? Am I notified somehow?

It's 17500 from your paycheck. Pretax if contributing to 401K and after tax if contributing to Roth 401K. Not all plans have the Roth option, so check with your administrator. Matches and profit sharing is not included in that 17.5K. Not sure what happens if you try to contribute more. Also note that if you max out before the end of the year, you might not get the match for the remaining paychecks that you're not contributing anything. At least, that's how it works for my plan. Again, talk to your plan administrator.

Quoting the IRS website below:

Remember that annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed the lesser of 100% of your compensation or $51,000 for 2013 and $52,000 for 2014. In addition, the amount of your compensation that can be taken into account when determining employer and employee contributions is limited. The compensation limitation is $255,000 for 2013 and $260,000 for 2014.

[wjcalderon]

Simple Question...I understand I can contribute up to $17,500 to my 401k in 2014. Is this $17,500 pre-tax from my paycheck only or does it include company match and profit sharing that is deposited to 401k? I assume it is just my paycheck.

Also, what happens if I choose a percentage of my check that would contribute more than $17,500 for the year? Am I notified somehow?

Most payroll systems will simply stop your deductions once you hit that $17,500 limit.
Check with your Payroll or HR department to find out for sure.

[MonkeyMama]

Most payroll systems will simply stop your deductions once you hit that $17,500 limit.
Check with your Payroll or HR department to find out for sure.

Yes, either they will catch it or it will create IRS problems or other problems. I would not advise knowingly withholding more than $17,500 for your 401k.

[bjl584]

Most payroll systems will simply stop your deductions once you hit that $17,500 limit.
Check with your Payroll or HR department to find out for sure.

I wouldn't rely solely on HR to watchdog this for you. But, you would end up getting a refund check of sorts if you do go over. It's not a huge deal if it happens. The simple answer to avoid this is to pick an amount or a percentage that will prevent you from going over. If you punch a clock and receive overtime this becomes a little more difficult, but you should be able to guess with a fair amount of accuracy.

[rennigade]

I picked a % that puts me at $17,500 well before the year is up. Your employer should have measures in place that will automatically stop your contributions when it hits the max.

Now if you changed jobs throughout the year you could risk going over. I went over by $1k last year...bad math on my part I guess. Wasnt really a big issue on my end...it was more of a headache for the accounting department. They had to reach out to fidelity to get the money back I went over, plus whatever gains that $1k made. Then my accountant had to include that when tax time came.

[DaveInPgh]

I picked a % that puts me at $17,500 well before the year is up. Your employer should have measures in place that will automatically stop your contributions when it hits the max.

Does your company provide any sort of match? If so, if you are maxing out your contribution early, aren't you leaving company money on the table?

I bumped this old thread because I was curious whether or not an employer would stop it automatically.

My plan provides a company match up to 5%. I suspect that if I were to hit my maximum early, reducing my bi-monthly contribution to 0%, then the company match would also go to 0%.

[sv2007]

So far, all the companies I've worked at have automatically stopped the paycheck deductions. I wouldn't mind too much about that.

[tripods68]

So far, all the companies I've worked at have automatically stopped the paycheck deductions. I wouldn't mind too much about that.

This is an old thread back in 2013