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Is it Dec 15 or Dec 31? I need to adjust my 401 (K) contributions for the 2007 fiscal year but am not sure which fiscal year my next paycheck will fall under (I will be paid on Jan 10 for work done between dec 15-31)

2007-01-04 18:57:03 · 4 answers · asked by rnr 2 in Business & Finance Taxes United States

4 answers

If you receive any pay dated December 31, 2006 or previous, then those earnings are part of the 2006 tax year. Any pay received January 01, 2007 onward is part of the 2007 tax year even if the hours worked were done between Dec 15-31.

2007-01-04 19:01:32 · answer #1 · answered by Lucy_Fur 3 · 1 0

The year ends on Dec 31 and income is considered to be for whatever year you actually get your paycheck in.
If you are concerned about maxing out your 401(k), most 401(k) managers will automatically stop deductions from your paycheck when you hit the tax limit, so you do not have to do the math.

2007-01-05 06:45:47 · answer #2 · answered by growing inside 5 · 0 0

Taxes are cash-basis and calendar year, meaning any cash that you receive between Jan 1 and Dec 31 are taxable for that year. One minute after midnight Dec 31, and it belongs to the following year.

2007-01-04 19:16:43 · answer #3 · answered by Anonymous · 1 0

Individuals are cash basis and on a calendar year. The check you get on 1/10 is 2007 income.

2007-01-04 20:34:33 · answer #4 · answered by mattapan26 7 · 0 1

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