I am 46, single, no kids. I am a health care professional. I feel that I'm generally a very good saver and a not so good budgeter - hence the credit card debt payoff I worked through in 2020.So remember how excited I was that I was going to be able to contribute to both a 457b & and a 401k? Well, I was wrong. My TSP is actually a 401a. Who knew? Obviously, not me. So now I have a tax penalty due to exceeding my contribution limit. I had to write a letter of instruction to Vanguard to start the process of withdrawing my excess contributions for 2016.
Another problem is that I've already contributed over $2k for 2017 & I'm not sure if they'll allow me to withdraw that as well. I'm not interested in having that small amount of money at Vanguard if the rest of my money is with the TSP. I do have a Roth IRA with Vanguard, but I don't want more accounts than I need.
Also, I'm not interested in going through this process again next year if I happen to go over the limit again. Yes, I can adjust my contributions throughout the year, but the easiest thing to do is just to withdraw this year's contributions & contribute entirely to the one account which will not allow me to exceed $18,000 in contributions.
What a bother! I thought I did my due diligence researching the tax laws, but I didn't realize that I had erroneously categorized one of the accounts. Lesson learned!
My Big Tax Mistake
February 12th, 2017 at 05:42 pm
February 12th, 2017 at 07:11 pm 1486926671
February 13th, 2017 at 02:13 pm 1486995197
Oh, well, lesson learned, right?