I am doing my taxes using TurboTax and there is a section regarding my contributions to 401k, I have contribution 5,000.00 and the system is saying that I over contribute by 1,000.00. The system is saying that I need to pull this amount out or I will be taxed on it by 6%. Is this true? Does anyone have insight to this?
2007-02-19 15:42:24 · 2 answers · asked by yahoo_chic 2 in Business & Finance ➔ Personal Finance
No. The legal pre-tax maximum for individual contributions to a 401(k) in 2006 is $15,000.
Website cited.
2007-02-19 16:04:17 · answer #1 · answered by R C 2 · 0⤊ 0⤋
Are you sure it's not asking you about contributions to an IRA? That limit was 4k. I'm not sure if you have to enter anything in for a 401k....If you look at your w-2 you'll see that the difference btween your box 1 income and box 2 income is the 401k contribution and since y ou put the lower of the two in as taxable wges and tips you've essentially already accounted for the pre-tax deferral.
2007-02-20 03:36:43 · answer #2 · answered by digdowndeepnseattle 6 · 0⤊ 0⤋