1. Home
  2. Taxes General Forum
  3. 401k and SIMPLE

401k and SIMPLE

In a situation where one has multiple employers during a year, and in which one offers a SIMPLE IRA and the other a 401(k), how are maximum contributions limited. In particular, if one has already contributed the maximum to the SIMPLE, is one still permitted to contribute to the 401(k)?

I am seeing conflicting answers on the Web. Some suggest that contributions to the 401(k) have the effect of reducing the $11,500 SIMPLE limit, and others suggesting that all that matters is the overall limit $17,000 limit. The first option has the effect diallowing contributions to the 401(k), while the second would allow $5500 of additional salary deferal.

Thanks, Bill.

Reply to
bill-deja
Loading thread data ...

one offers a SIMPLE IRA and the other a 401(k), how are maximum contributions limited. In particular, if one has already contributed the maximum to the SIMPLE, is one still permitted to contribute to the 401(k)?

Yes. The $17,000 (taking your word for that) limit is on salary deferrals. Since the SIMPLE limit is lower one can make up the difference in 401(k) contributions to another employer's plan.

Phil Marti VITA/TCE Volunteer Clarksburg, MD

Reply to
Phil Marti

BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.