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. What are the advantages of an index fund over an ETF?

    Diversifying a portfolio is one of pillars of investing basics, and an index fund can provide an investor with exposure to ...
  2. How do deferred tax assets help in meeting retirement goals?

    Learn how tax deferred assets can help individuals achieve long-term financial goals such as retirement and how they differ ...
  3. What are the best ways to pay less income tax?

    Learn about reducing your income tax burden by contributing to an employer-sponsored retirement plan or IRA, and see what ...
  4. Should I use a deferred tax asset for all of my retirement funds?

    Look outside tax-deferred accounts for retirement savings that are worthwhile now and later. Invest a portion in after-tax ...
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. Mutual Funds & ETFs

    Greedy on the Dollar? See This Leveraged ...

  2. Trading Strategies

    American Express: Headwinds and Tailwinds

  3. Professionals

    Why Retirement Advice Is Better But ...

  4. Stock Analysis

    Playing The Bull Run Without Worry

  5. Professionals

    Coming Soon: Private Equity In 401(k) ...

Trading Center