3 comments so far...

• bud68 Said on November 29th, 2009 at 8:56 pm:
  

  I think you’re confusing 401(k) accounts with IRA accounts. They are different.

  For 2007, the 401(k) limit is $15,500 (+$5,000 if 50 or older). The 2007 total IRA limit is $4,000 ($5,000 if 50 or older).

• uscav8r Said on November 29th, 2009 at 9:50 pm:
  

  IRA’s are totally different than 401(k)’s so make sure you aren’t combining the two terms.

  There is the possibility that your employer offers a Roth 401(k) in addition to a regular 401(k). For 2007, the TOTAL maximum contribution to all 401(k) accounts was $15,500, or $20,500 if you are age 50 or older.

  Sounds more like you contributed to two different self-directed IRA accounts outside your employers offerings. The TOTAL maximum amount across all types of IRA accounts was $4,000, or $5,000 if age 50 or older.

  You apparently are claiming a total of $4,500 in IRA’s, which would make you younger than 50 if TurboTax is giving you a red-flag.

  I would double-check your inputs into the program. Are you sure the $3,000 was in an IRA account or in an employer-managed 401(k) account (likewise for the $1,500 amount)? Or vice-versa? Those are input on different sheets in TurboTax.

• digdowndeepnseattle Said on November 29th, 2009 at 10:35 pm:
  

  you are entering in your 3000 into Turbo Tax and you shouldn’t. The 401k deduction is already accounted for in your net income. If you look at your w-2 you’ll see that the social security income is at least $3,000 higher than the taxable amount. The difference is your 3k traditional 401k contribution.

  Little confused when you say $4k limit for Roth 401k. That’s not true…the $4k limit is for all IRA’s not 401k’s. The limit for 401k’s is $15.5k and can be split any way between ROTH and Traditional. Either way it’s all accounted for in the w-2 and shouldn’t be entered into TurboTax at all.