401(k) and Defined Contribution Plans | Maryland 401 K Attorney
401(k) plans are a type of defined-contribution plan that offer deferred tax benefits. 401(k) plans are very popular and usually provided by employers. Employees may benefit by contributing a portion of their pre-tax income into the plan which the employer may match up to a limit. While 401(k) plans are relatively common, a Maryland 401 K lawyer can tell you that they can also be very unclear and full of tax traps for the unwary.
When You Need to Hire a Maryland 401 K Attorney
There are some common situations where you may want to contact a Maryland 401 K lawyer to learn about your rights in a 401(k) plan. Some common situations include:
- Taxes. You can make pre-tax or post-tax contributions to a 401(k) plan. Your gains from a 401(k) are typically tax-deferred meaning that you won’t have to pay tax on it until a much later date. Participants in a 401(k) may have the option of designating a contribution as a Roth 401(k) deduction. In this case, you make after-tax contributions, but your distribution may be tax free. An attorney can help advise you on whether this option is best for you.
- Withdrawals. If you make an early withdrawal of your funds from a 401(k) plan, you could face severe penalties. However, there may be cases where you may be permitted to make an early withdrawal penalty-free. Your 401(k) attorney can help you examine these circumstances.
- Force-Outs. Many 401(k) plans have a force-out provision if you have too little money invested. If you believe you are being forced out for an improper reason, you should talk to an attorney.
- Rollovers. While early withdrawals of 401(k) money may be subject to a tax penalty, rollovers from one qualified plan to another should be penalty free. An attorney can advise you on any tax consequences of your rollover.
Contact a Maryland 401 K Attorney
To learn more about your rights and responsibilities regarding a 401(k) plan or other defined contribution plan, you will want to talk to an attorney. Contact an attorney at H&H LawWorks, LLC by calling (240) 403-2693.