I worked for two different companies last year and my total 401(k) contributions exceeded the legal limit. What should I do?
You should notify the benefits departments of both employers as soon as possible, so they can take the necessary steps to correct the error. If you do not get the excess amount refunded to you before April 15 of the year following the calendar year in which you paid too much, you will have to pay a 10 percent penalty on the amount, as well as federal, state and local taxes. For 2002, the maximum amount you can contribute before taxes to your 401(k) (or 401(k)s, if you work for more than one employer during the year) is $11,000. This limit was $10,500 in 2001.
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