A 401(k) is a feature of a qualified profit-sharing plan that allows employees to contribute a portion of their wages to individual accounts.
*Note: it is important to contact your plan administrator for complete details on your 401(k) plan.
*Note: www.irs.gov website was used to provide this information to you.
Grow tax-deferred until distributions are made from the plan
Most retirement plan distributions are subject to income tax and may be subject to an additional 10% tax.
Generally, the amounts an individual withdraws from an IRA or retirement plan before reaching age 59½ are called ”early” or ”premature” distributions. Individuals must pay an additional 10% early withdrawal tax and report the amount to the IRS for any early distributions, unless an exception applies.
*Note: Contact your plan administrator for the proper information on hardship distributions and loans.
Note: You should always consult an accountant if you choose to withdrawal funds from a retirement account
Two annual limits apply to contributions:
The limit on employee elective deferrals (for traditional and safe harbor plans) is:
$18,000 in 2015 - 2017
Plan-based restrictions on elective deferrals: *Note: Contact your plan administrator
If permitted by the 401(k) plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions. The additional elective deferrals you may contribute is:
Total annual contributions (annual additions) to all your accounts in plans maintained by one employer (and any related employer) are limited. The limit applies to the total of:
The annual additions paid to a participant’s account cannot exceed the lesser of: