401(k) contributions are not subject to FICA taxes (Social Security and Medicare taxes). FICA taxes are only imposed on wages, salaries, and other forms of compensation. 401(k) contributions are not considered wages or compensation, as they are made before taxes are withheld from an employee’s paycheck. Instead, 401(k) contributions are deducted from an employee’s paycheck … Read more
.̟)_/¯_^_*_*_*_*_*_*_*_*_*_yx*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_{__*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*__*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_*_**+~*_*_*__*_*_*_*_*_*_* : wife Transferring TSP to a 401(k) Are you looking to consolidate your retirement savings? If you have a Thrift Savings Plan (TSP) from your federal employment and a 401(k) from your current job, you may be able to roll over your TSP funds to your 401(k). 401(k) Rollover Options There are two main … Read more
If you accidentally contribute more than the allowed limit to your 401(k) plan, you’ll need to report the excess contribution on your tax return. You should include the excess amount as income on Form 1040, line 1. Then, you’ll need to pay an additional 6% tax on the excess contribution on Form 5329, Part IV. … Read more
401k plans are retirement savings accounts offered by employers to their employees. They are not insured by the Federal Deposit Insurance Corporation (FDIC), which protects deposits up to $250,000 in FDIC-member banks. Instead, 401k plans are regulated by the Employee Retirement Income Security Act (ERISA), which provides certain protections to participants. These protections include requiring … Read more
**401(k) Taxation** A 401(k) retirement plan is a tax-advantaged savings vehicle offered by employers. Contributions made to the plan are deducted from the employee’s paycheck before taxes, reducing their current taxable income. This provides an immediate tax savings. **Taxation of Contributions** Contributions to a traditional 401(k) plan are pre-tax, meaning they are deducted from the … Read more
Yes, you can usually roll over your 401(k) into a Roth IRA, but it’s important to understand the differences between the two types of accounts. A 401(k) is an employer-sponsored retirement plan, while a Roth IRA is an individual retirement account that you set up and fund yourself. Key differences include tax treatment and income … Read more
When switching jobs, you may wonder what to do with your 401k plan. You can either roll it over to your new employer’s plan, if they have one, or to an individual retirement account (IRA). Rolling over to your new employer’s plan is typically the simpler option, as you won’t have to worry about managing … Read more
Want to know if you can roll over funds from a traditional 401(k) plan into a Roth IRA? Yes, it’s possible! This is called a Roth conversion. However, there are some important factors to consider before making this move. Unlike traditional IRAs and 401(k)s, which are tax-deductible now and taxed upon withdrawal, Roth IRAs are … Read more
A third-party administrator (TPA) plays a significant role in managing 401(k) plans. They handle various tasks, including recordkeeping, investment administration, and participant communication. The TPA ensures compliance with regulations and provides support to plan sponsors and participants. They process contributions, maintain participant accounts, and handle distributions. Additionally, TPAs facilitate investment options and provide access to … Read more
Withdrawing money from your 401k principal, which is the money you contributed pre-tax, can be a complex process with potential tax implications. To withdraw funds, you’ll need to contact your plan administrator and determine the withdrawal options available. Typically, you can only withdraw your principal if you are over 59.5 years old, or if you … Read more