Interesting. I am exempt from social security and I am assuming that would only be for my income and not my combined return with my wife (how would my employer be able to know this - they wouldn't). So I should doge this bullet.One thing to know is that after 2025 (i think) the rules on catch-up contributions are changing, in that if you earn $145k or more in the previous year, any catch-up contributions will now have to be made into a Roth 457/401/etc instead. At least that's my understanding of the new rules.
Note that the income figure that's used for the $145k calculation is very specific, and different from most other tax-related calculations. As near as i can tell, it's the "Social Security Wages" number from your previous year's W2 for that employer, which doesn't include any deductions. I think that was probably chosen in order to make it easier for the employer (who doesn't know all your tax deductions) to determine how to calculate your limits.
This rule is designed to punish people like me because I'm going to use the catch up provision to shield $46k of pre tax income each year for 3 years (or more based on the base rate going up). Can you send me the link for this proposed change?
Statistics: Posted by HMSVictory — Fri Jun 14, 2024 6:46 am