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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13317
Experience:  15years with H & R Block. Divisional leader, Instructor
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, I made 89,000 last year and I was putting 1000 a

Customer Question

Customer: ***** *****
JA: Thanks. Can you give me any more details about your issue?
Customer: I made 89,000 last year and I was putting 1000 a month into a 401K. When I got my check I got 330.00 and the rest of the 1000. went to taxes. I stopped the 401.K to try to figure out what the break point is. I don't know how much I should be putting in the 401K. I don't want it to go to taxes when I can keep it.
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Submitted: 10 months ago.
Category: Tax
Expert:  Robin D. replied 10 months ago.

Hello

The amounts deferred under your 401(k) plan are reported on your Form W-2, Wage and Tax Statement. Although elective deferrals are not treated as current income for federal income tax purposes, they are included as wages subject to Social Security (FICA), Medicare, and federal unemployment taxes (FUTA).

You should check what taxes were paid on the wages. The amount for 401k would have been taken out before any income taxes were calculated.

If your employer matches contribute enough to get the full match. If you do not then you are missing out on money.

Customer: replied 10 months ago.
that does not answer my question. If I make 89000 and put 1000 in a 401k how much more do I need to contribute to avoid maximum taxes
Expert:  Robin D. replied 10 months ago.

Tell me how often you are paid.

Expert:  Robin D. replied 10 months ago.

I also need to know what your allowances are for withholding and your filing status (married, single)/

$18,000 is the limit on contributions for 401(k). You can not put more than that amount.

There are catch-up contributions (for people aged 50 and older) which remain at $6,000.

So if you wish to have the most and defer the maximum on tax you can push your contributions to the limited amount.

Customer: replied 10 months ago.
single
paid once a month
I have to look up the withholding amount
Expert:  Robin D. replied 10 months ago.

Thanks

Expert:  Robin D. replied 10 months ago.

Current taxes you saved would be $375.00 if you can move up to $1500 a month in your contributions.

You cannot go over that because the limit is $18000 for the year.

SO $1500 is the most you would be allowed.

Customer: replied 10 months ago.
ins 37.13
ss 451.23
Medicare 105 53
has 310.00
fed 1171.60
Expert:  Robin D. replied 10 months ago.

that is the most you can have contributed or you will be over the limit for contributions

  • Monthly Gross Pay per month $7,417.00

  • Federal Withholding would be $1,454.98

  • Social Security $459.85

  • Medicare $107.55

  • 401k $1500