I don’t think we should be garnished with a box of Grandpa’s Grandma’s Grandpa’s Little Stuff. I think we should be garnished with a bottle of Bobbier, a piece of marzipan, or other nice flavor-rich color.
The other day I was talking to a friend of mine about 401k. She said she had a 401k that was in great shape, probably because she didn’t save enough. What she didn’t realize was that a good 401k is not the same thing as a good 401k that’s in great condition. A good 401k is simply the best 401k you could possibly have, in the exact amount you saved for it.
If you saved a certain amount every month or year, the result is a 401k that will be worth more than the 401k you had in the beginning. As long as you pay your taxes on time and take prudent care of your investments, you should never have to worry about missing a tax deadline.
The same is true when it comes to investing in your 401k. But even if you have a good 401k, the IRS might not approve it. The tax code allows you to save up to $2,000 per employee, and even if you have a 401k that is worth $1 million, you might be able to claim a tax refund for it. Don’t panic! The IRS has a lot of information about which 401k accounts are profitable.
If you have a 401k and it is worth more than 2,000 per employee, then you can claim a tax refund for it. Not only that, but you can withdraw funds from it immediately. This is not as good of a deal as it sounds. The reason is that your 401k could be considered an IRA. If you withdraw funds from it before it is fully depleted, you will immediately be taxed on the money.
So if you have an IRA, and your employer has a 401k. If the 401k is worth more than 2,000 per employee, then you can withdraw funds from it. Not only that, but you can withdraw funds from it immediately. This is not as good of a deal as it sounds. The reason is that your 401k could be considered an IRA. If you withdraw funds from it before it is fully depleted, you will immediately be taxed on the money.
Because your 401k is an IRA, you only receive the funds if the IRS decides that they are taxable. They will tax the amount of money you have in your 401k, plus any other income you receive from it. If the money you withdraw from an IRA is not taxed, and you owe money to your employer, then you could have a problem.
If you want to be eligible for an IRA, you have to pay a $100 penalty, or you could have to pay an even higher amount to qualify for a Roth IRA. Or you could have to have to pay a $1,000 fine for not making a $100 deposit in your IRA. So it sounds like you’re going to have to make the most of the money you have saved up for your 401k, since your Roth IRA will not be taxed at all.
What about the taxes you owe to your employer? Is that taxable? It’s certainly not. But if you need to pay a tax on your employer’s money, you can do so by using your employer’s 401(k) contribution as well. If you need to pay a tax on your employer’s money, you can use your employer’s contributions to qualify for a Roth IRA.
You can use your employer contribution as an IRA in the form of a Roth IRA, but you will need to pay a tax on your employer contributions in order to qualify for the Roth IRA.