Originally Posted by
CX500T
Do you know where in the IRS regs the compensation limit is 305/330? I can find the "max is 61k" and "no more than 100% of your compensation" but I haven't done an exhaustive search of IRS regs.
Non related to contract, but I'd almost prefer if the IRS took X percent off the top and I never had to worry about having some record from 6 years ago, audits, filing, nothing. Just here is XX percent of your gross, have a nice life. Our tax code sucks. But back to contract limits.
Did not know there was a max limit, other than can't exceed 100%. Thank you.
there are a few IRS 401K limits
employees cannot contribute more than a certain amount of their income (20.5k in 2022, 22.5k in 2023)
415c limit. employee + employer cannot exceed a certain number (61k in 2022, 66k in 2023)
both of the above are subject to catch up if you are 50+
your employer cannot use your salary beyond a certain threshold to calculate their contribution (305k in 2022, 330k in 2023) to find this number multiply the 415c limit by 5
if you put nothing in your 401k the income limit will be your limiting factor for how much the company can contribute. If you put in money yourself the 415c limit will most likely apply.
on a side note I think this is an excellent argument for a 20% (or better) DC, this way a pilot can reach the 415c limit when they also hit the income limit, assuming no personal contribution