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김광호
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4/1/2015 12:22:36 PM
Your question caught my attention as I was honestly not aware of the tax code you mentioned in your question. After reading your question, I initially agreed with IRS Rep because that is the normal remedy/procedure when this thing happens although it rarely happens in the real world.
I looked into the fine print of the tax code 4979(f)(2) word by word and then came to a conclusion that your employer has a point according to the written tax code.
In order not to have any tax implication on your 2014 tax return, the excess has to be distributed before Feb 15, 2015. However, in the case of automatic contribution arrangement (or “Plan”), the company has 6 months to do so. In reality, most (if not all) of employers implement 401(k) Plan which can be automatically deducted and contributed to the Plan Administrator, therefore; your Plan most likely is qualified for the 6 month extension.
Since your employer is not changing your taxable wages for 2014 by following the tax code specified, and subsequently will issue 1099G in 2015, I would go with what your employers is suggesting.
If your employer is not disclosing the change to IRS, then IRS would not know otherwise.
Thanks,
Kwang
I looked into the fine print of the tax code 4979(f)(2) word by word and then came to a conclusion that your employer has a point according to the written tax code.
In order not to have any tax implication on your 2014 tax return, the excess has to be distributed before Feb 15, 2015. However, in the case of automatic contribution arrangement (or “Plan”), the company has 6 months to do so. In reality, most (if not all) of employers implement 401(k) Plan which can be automatically deducted and contributed to the Plan Administrator, therefore; your Plan most likely is qualified for the 6 month extension.
Since your employer is not changing your taxable wages for 2014 by following the tax code specified, and subsequently will issue 1099G in 2015, I would go with what your employers is suggesting.
If your employer is not disclosing the change to IRS, then IRS would not know otherwise.
Thanks,
Kwang
