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  • Atricle Dump - If I Have More Than One Employer Can I Have More Than One 401k Limit of $14 000?

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    on to the limit on elective deferrals, annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed th
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    One of the questions we get asked a lot is, I know the limit that the IRS puts on my 401k contributions for the year is $14000 (for a person under 50) (2005) but is this the limit I can get from one employer or is it the total amount I can get from all my employers? So if I had 5 jobs could I get a total of $70 000 5 x $14 000 in contributions?

    The simple answer is $14 000 is the personal limit you have as an individual and there for the total from all your employers, so if you have more than one employer then between you all the total that can be added for each year is $14 000. If you do over pay into the plans you have, it is easy to do if you are running more than one plan with more than one employer making contributions, you can claim back the overpayments but the claim must be made by 15th March.

    The part of the IRS guidelines that causes a lot of confusion with reference to these limits is this paragraph;

    “Additional limits. There are other limits that restrict contributions made on your behalf. In addition to the limit on elective deferrals, annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed the

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    yers? So if I had 5 jobs could I get a total of $70 000 5 x $14 000 in contributions?

    The simple answer is $14 000 is the personal limit you have as an individual and there for the total from all your employers, so if you have more than one employer then between you all the total that can be added for each year is $14 000. If you do over pay into the plans you have, it is easy to do if you are running more than one plan with more than one employer making contributions, you can claim back the overpayments but the claim must be made by 15th March.

    The part of the IRS guidelines that causes a lot of confusion with reference to these limits is this paragraph;

    “Additional limits. There are other limits that restrict contributions made on your behalf. In addition to the limit on elective deferrals, annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed th

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    between you all the total that can be added for each year is $14 000. If you do over pay into the plans you have, it is easy to do if you are running more than one plan with more than one employer making contributions, you can claim back the overpayments but the claim must be made by 15th March.

    The part of the IRS guidelines that causes a lot of confusion with reference to these limits is this paragraph;

    “Additional limits. There are other limits that restrict contributions made on your behalf. In addition to the limit on elective deferrals, annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed th

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    e claim must be made by 15th March.

    The part of the IRS guidelines that causes a lot of confusion with reference to these limits is this paragraph;

    “Additional limits. There are other limits that restrict contributions made on your behalf. In addition to the limit on elective deferrals, annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed th

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    I am going to introduce you today to a concept that if you understand and implement, will be the deciding factor of your financial success in your life. Like all great knowledge, this one is also dangerously simple, and that’s why most people don’t get it! But before I get to that, let me share with you a great quotation that I read recently:on to the limit on elective deferrals, annual contributions to all of your accounts - this includes elective deferrals, employee contributions, employer matching and discretionary contributions and allocations of forfeitures to your accounts - may not exceed the lesser of 100% of your compensation or $42,000 (for 2005, $44,000 for 2006). In addition, the amount of your compensation that can be taken into account when determining employer and employee contributions is limited. In 2005, the compensation limitation is $210,000; for 2006, the limit is $220,000.”

    Now a lot of people ask us at http://www.the401k.info how the limit can be $42 000 and this is the best explanation we have seen so far,

    Ok, let's say you make $260,000 per year, your plan allows you to defer up to 100% of your compensation, and your employer matches all your deferrals up to 3% of your compensation plus makes a 5% profit sharing contribution to all participants. In your case, for 2006, you could defer the maximum legal limit of $15,000 (roughly 6.8% of your legally capped compensation of $220,000), receive a match of $6,600 (3% of your legally capped compensation) plus $11,000 in profit sharing contribution (5% of your legally capped compensation), for a total of $32,600, well below the $44,000 overall

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