Hello,
I opened an Individual 401K for myself and my husband last year (2023). We decided to max out our contributions, and contributed a majority of them in April 2024 right before the deadline.
My husband has a day job with a 403b. He makes the maximum contribution allowed by his employer to that plan too.
There was a communication error between our accountant and ourselves as to how much we were allowed to contribute to our I-401K, and we ended up over-contributing to my husband's employEE side, (Roth).
Below I'm posting what my accountant told me I should do to get out of this mess. I want to hear from you all, my dear Bogleheads, if you believe my accountant's plan is correct about how I proceed, and also if you know if there are any pitfalls I should look out for in this process.
(In the past I've received factually incorrect information from more than one area accountant, so from now on I'm running everything any "expert" tells me by you all before I act on it to save me grief down the road.)
Here's what my accountant said:
"The employee portion of the 401k and 403b plan does aggregate.
That being said, if you have confirmed that the TIAA plan is indeed a 403(b) plan, then the overcontribution for the year is the $14,267.45 employee contribution shown on the TIAA plan.
Since you made the solo 401k contribution in 2024, the first step is to contact the solo 401(k) administrator* and inform them that you mistakenly applied part of Jensen's employee 2024 contribution to 2023.
If they agree to correct it for you by moving 15k from 2023 to 2024 (or if they won't be able to do it partially, moving the whole employee contribution to 2024 will be ideal as well), there will be no further issues. If not, let me know, and we can discuss the next steps to remove the 14k."
*[Side note: I asked and my accountant meant "custodian" which is Vanguard, and not the actual plan "administrator" which is me.]
Thank you.
I opened an Individual 401K for myself and my husband last year (2023). We decided to max out our contributions, and contributed a majority of them in April 2024 right before the deadline.
My husband has a day job with a 403b. He makes the maximum contribution allowed by his employer to that plan too.
There was a communication error between our accountant and ourselves as to how much we were allowed to contribute to our I-401K, and we ended up over-contributing to my husband's employEE side, (Roth).
Below I'm posting what my accountant told me I should do to get out of this mess. I want to hear from you all, my dear Bogleheads, if you believe my accountant's plan is correct about how I proceed, and also if you know if there are any pitfalls I should look out for in this process.
(In the past I've received factually incorrect information from more than one area accountant, so from now on I'm running everything any "expert" tells me by you all before I act on it to save me grief down the road.)
Here's what my accountant said:
"The employee portion of the 401k and 403b plan does aggregate.
That being said, if you have confirmed that the TIAA plan is indeed a 403(b) plan, then the overcontribution for the year is the $14,267.45 employee contribution shown on the TIAA plan.
Since you made the solo 401k contribution in 2024, the first step is to contact the solo 401(k) administrator* and inform them that you mistakenly applied part of Jensen's employee 2024 contribution to 2023.
If they agree to correct it for you by moving 15k from 2023 to 2024 (or if they won't be able to do it partially, moving the whole employee contribution to 2024 will be ideal as well), there will be no further issues. If not, let me know, and we can discuss the next steps to remove the 14k."
*[Side note: I asked and my accountant meant "custodian" which is Vanguard, and not the actual plan "administrator" which is me.]
Thank you.
Statistics: Posted by WoodSprite — Mon Jun 17, 2024 4:22 pm — Replies 4 — Views 212