I am currently an employee and have just become eligble to contribute to our groups 401K plan (after 12 months of service). Given that it is near the end of the year can I #1. contibute my entire paycheck minus medicare and SS withholding to the plan up to my limit (15.5K?) and #2 can my contributions continue until April 15, 2008 or am limited to contributing to until 12/31/07 in order to claim tax deductions for 2007.
Thanks

Zip Code: 90405

That's great that you're trying to max out your retirement plan contributions for 2007.

Most plans allow you to contribute the full amount of your paycheck, less social security and Medicare taxes, into your 401k account as a salary deferral. With 401k salary deferrals, you pay social security and Medicare taxes now, and you don't pay it again when you withdraw money from your 401k account down the road.

You want to check with the person who handles payroll and benefits for your practice about what steps you need to take to make sure this gets done right. You might also need to talk with the group that helps with the management of the practice's 401k plan (usually called the Third Party Administrator). The sooner you start working on this prior to your next payroll, the better off you'll be.

And you only have until 12/31/07 to contribute to your 401k plan for 2007 through salary deferrals. That's because money is being withheld from your pay each pay period, and the amount you contribute needs to be reflected on your W-2 form issued in January.

The practice has until the due date of its tax return, including extensions, to make any matching contributions and additional profit sharing plan contributions.

Zip Code: 01801