hmm thanks dmertz!
so in essence I'm only paying double tax on the couple of hundred dollars now and at retirement. And I'm paying taxes only once on the earnings of this excess deferral at retirement. So, it makes more sense to leave this amount alone.
1. Right now: Excess $500 into 401K
-Pay tax now in 2022 [extended tax filing deadline of October 17th for tax year 2021] on $500 [1st time]
2. At retirement: Total amount = $500 + $2000 [approximate earnings in 20 years just on that $500]
- pay taxes on $500 again [2nd time]
-pay taxes on the $2000 which I'd have to pay only once either way irrespective of it being earned on the excess.
Am I assuming correctly?
Thanks in advance.
