Can an employee contribute entire salary to its 401K as long as it does not exceed employee contribution limit on 18K(2017)?
for example put total of 18K to 401K out of total of her salary of 21K?
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Yes, an employee can contribute up to a maximum of $18,000 (plus $6,000 of catch-up contributions if aged 50 or over) as long as her salary is equal or greater than her contributions.
Is it allowable to have a net negative paycheck in order to contribute 100% of wage to 401k? In 2019 looking to contribute 19000 to 401k plan and have wage of $19k. How does this work when needing to also pay social security taxes as well as federal withholding tax?
But my employer is telling me that they can only do 90% as they will need to deduct state tax, FICA and medicare tax--
I thought if your salary is $0 because you deducted it all pretax-- there shouldnt be a state tax or Fica or medicare tax bill-- am i correct
The 401K is not exempt from FICA taxes and some states do not allow the 401K deduction so talk to the employer again so they can better explain it.
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