Year-End 401(k) Documentation You Should Receive
Now that 2008 has come to a close you should be expecting to receive a few things in regards to your 401(k) or other qualified plan. The first thing you should watch for is your year-end statement. At the very least, every 401(k) plan is required to send out one paper statement, and this will likely be your year-end statement. These statements are usually generated by the middle of the month so you should except to receive yours by the end of January. (This is also a great time to update all contact information and verify your address with your 401(k) provider).
Another document you should expect is your W-2. Your pre-tax contributions will be reported on your W-2, which is sent by your employer and must be mailed by January 31st. It is a good idea to compare your contribution amount from your statement to your W-2. If worked more than one job this year and contributed to more than one plan, your total contributions among both plans cannot exceed the IRS limitations of $15,500 and for those over 50 years old, $20,500. If you happen to contribute more than the IRS limit you will need to request a refund for the amount over the limit and claim this as income when you file your taxes. Please contact your 401(k) provider for more information.
If you took a taxable withdrawal or distribution from your 401(K) last year, you should expect a 1099-R. This will show the amount withdrawn and the amount withheld for taxes. You will receive this form for a withdrawal, a distribution (this includes the required minimum distribution for those over the age of 70 ½) or defaulted loan. To learn more about your distribution options, check out our Insight article series, starting with “Your Retirement Plan Options Pre Age 59 ½“
Another form your might receive is a 1099-Div. Dividends paid out and not reinvested are reported on this form. In 401(k) plans, this usually occurs if one of your investments is company stock and you have elected to have any dividends paid out to you instead of being reinvested into your account.
If you still have an old account from a former employer, you will receive the noted documentation on these investments as well. So, be sure you have a list of all investments to ensure you have received the proper paperwork from both your past and present plans. This is also a great opportunity to think about consolidating your past employer plans and rolling them over to your new plan or an IRA. A rollover does not create a taxable event and does not need to be reported.
Overall, by the end of the month you should expect to receive something in regards to your 401(k) investments this past year. Save those statements, double check the final numbers; and begin to get everything in order for your taxes. To make sure that you are not missing any information it would be wise to contact your 401(k) provider and all affiliated companies to confirm they have the correct contact information.
If you want to confirm your contact information with us, feel free to log into your account here or contact us at info@smart401k.com or at 877-627-8401.
Jessica Slaters, Investment Advisor
