Tax Law (Questions About Taxes)/401k and taxes

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Question
Hi John,
I was employed for 32 years with my former employer before I was terminated in February.  I have a 401k still managed by them.

After a couple of months being unemployed, I have a new job but they don't offer a 401k.  

My question is, can I contribute a lump sum to my 401k in December from my savings account and still have the income tax benefit that I had when my former employer was making deductions from my weekly paycheck when I file my taxes for 2014?

Thanks,
Lou

Answer
Lou,

Thanks for your question.

Unfortunately, a 401(k) is always tied to your employer and you can only make contribution to the plan as an employer.  As an employee, your options for a retirement plan are limited to a traditional or Roth IRA, with a maximum annual contribution of $5,500 unless you are age 50 or greater, then the limit is $6,500.  The limit is a total amount for all types of IRA's.

Hope this helps.

John Stancil, CPA

Tax Law (Questions About Taxes)

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John Stancil, CPA

Expertise

I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

Publications
The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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