Can I contribute to my company-sponsored 401(k) after the company's year-end but before its tax-filing date?

By Denise Appleby AAA
A:

Unlike IRAs, where contributions can be made for the previous year up to April 15 of the current year, salary deferral contributions generally apply to they year in which they are actually withheld from the participant's wages/salary. For instance, assume that an employee makes an election to defer part of the bonus he will receive for the year 2006. The bonus is based on his 2006 compensation but is paid on January 31, 2007. The amount deferred from the bonus will apply to his 2007 salary deferral contributions.



To learn more on this topic, check out Making Salary Deferral Contributions - Part 1 and Part 2.



This question was answered by Denise Appleby
(Contact Denise)



RELATED FAQS

  1. How do Pay As You Go pension plans work?

    Learn how pay-as-you-go pension plans are different than fully funded pension plans and why some government plans are running ...
  2. Who is eligible for a Teacher Retirement?

    Learn about the retirement option, the Teacher Retirement System, offered to teachers and other public school employees, ...
  3. What's the difference between a financial advisor and a financial planner?

    Seeking professional advice from a financial advisor may involve asking for financial help from a certified financial planner, ...
  4. What are the main benefits of a Locked-in Retirement Account (LIRA)?

    Read about the main benefits you can realize from transferring your Canadian pension funds into a Locked-in Retirement Account, ...
RELATED TERMS
  1. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  2. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  3. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  4. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...
  5. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...
  6. Peri-Retirement

    A term for the period of time leading up to actual retirement. ...

You May Also Like

Related Articles
  1. It can be great to live in the moment, but the actions and decisions you make now can greatly impact your sense of financial security down the road.
    Personal Finance

    How Do Americans Keep Minimizing Their ...

  2. You need to be patient, diligent and perseverant to be successful at investing, but more importantly, you need to start early.
    Investing Basics

    Why You Should Start Investing Early? ...

  3. Many of us fantasize about winning a big lottery jackpot. Let’s say that actually happened? What would you do with the money? How would you manage it?
    Professionals

    Tips For Managing A Cash Windfall

  4. Retirement

    Planning Ahead for 2015's Tax Law Changes

  5. Even though inflation currently seems tame, it's still the worst enemy of retirees. Here are some tips to reduce its impact.
    Professionals

    Tips For Managing Inflation In Retirement

Trading Center