401k over contribution
I already maxed out my 401k contribution for 2018 while employed at FB. I’ve joined Google this month, and looking to put additional $18,500 from my sign-on bonus to get Google’s $9,250 match. The two companies work with different firms (Vanguard vs Fidelity). My question is: how can IRS track this over contribution? In case if it gets flagged, at the worst case my contribution should be rolled over to 2019. Am I right? Did anyone ever make over contribution to 401k when switch companies? Share your experience and thoughts. One solution could be withdrawing my FB contribution in early 2019 when W2 is on hand (along with the match), so that total 401k contribution for 2018 remains $18.5k: https://20somethingfinance.com/over-contribute-to-a-401k/
20somethingfinance.com
Don’t do that, IRS will find that fraud when you are filing tax next year
Both companies will have W2's reporting the 401K contribution, so IRS would definitely know. Not sure what the consequences would be.
I edited the post with a possibility to withdraw the contribution made with FB earlier this year. It sounds legit to me, as I will have to pay 10% penalty for untimely withdrawal I guess.
This is correct, remove the fb contributions and put in google contributions to replace.
You should have no penalty if it's done in the same tax year as the contributions, since you got no tax advantages, essentially. But of course just ask a real CPA to be sure.
If you kindly read the details in the link, it sounds IRS allows withdrawal of excess contribution by April 15 (read at the bottom).
Can't you just do post tax 401K at Google, that way Google will still match it and you won't have to worry about your contribution with IRS.
Do you withdraw $18500 and $9250 and take 10% penalty on both withdrawals? I wonder if I can still do this if I join Google on Dec 17.
Don't do this
If you contribute after tax, Google might match in the pre-tax account. Check that with the benefits department.
Do not do. IRS will catch and fine you. They can do it anytime in the next 7 years. I was fined for some stupid mistake of a bank 3 yrs after I filed taxes.
When u file taxes with these w2s, you can be fucked. Remember one thing: no one escapes from IRS for long. So dont fuck with them. You will regret it later
Did you read the links OP posted? It explains exactly this scenario. When you get the W2 you can withdraw the excess and get a 1099-R which is the recommendation.
Don’t blame him. I edited the post with the link I found earlier, in case people are not aware of it.