Is it too late to max out my 401k?
December 7, 2014 6:01 PM   Subscribe

I get paid monthly, usually at the beginning of the month. I just realized I can contribute a bit more to my 401k since I'm under the $17500 limit for the year. However, my last paycheck has come in (unless HR decides to pay the next one in late Dec rather than early Jan). Has my window of opportunity closed?
posted by redlines to Work & Money (4 answers total)
 
It's pretty darn uncommon for people to be paid "in advance", where people are paid ahead of work being done. Most people are paid "in arrears", which means your early January paycheck covers your work in December. If that's the case, your early January contribution to your 401(k) counts against the current year contribution limit to your 401(k), because the paycheck is for work in the current year.
posted by saeculorum at 6:09 PM on December 7, 2014


If you are not able to contribute to your 401(k), you are able to convert to a Traditional/Roth IRA until April 15.
posted by saeculorum at 6:23 PM on December 7, 2014


> If that's the case, your early January contribution to your 401(k) counts against the current year contribution limit to your 401(k), because the paycheck is for work in the current year.

I do not believe that this is true. In general, IRS only cares about the date the transaction happened. My 2014 bonus will be paid in 2015, and counts as my 2015 income. If I write a check to a charity in 2014, but it is not cashed until 2015, then I cannot itemize it on my 2014 return. And so forth.

Since 401k specifically requires payroll deductions, I'm afraid that you have missed your opportunity. But as saeculorum said, you can probably contribute to an IRA or if you have an HDHP (high deductible health plan), you can put money in an HSA (health savings account).
posted by ethidda at 7:44 PM on December 7, 2014 [1 favorite]


ethidda, if you write a check in 2014 it counts in your 2014 reporting. If however it turns out it was never cashed then you can make adjustments to either your 2014 return or, depending on what it was for, your 2015 return.

As far as 401k contributions, check with your plan to see if you can make a manual deposit or bank transfer.
posted by Gungho at 8:39 AM on December 8, 2014


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