Special Social Security announcement about the IRS: Do it today without fail

The Internal Revenue Service (IRS) of the United States has issued an important notice about 401(k) retirement plans for 2025. If you have accidentally contributed more than allowed, it is crucial that you take action today to avoid tax penalties.

For the 2025 tax year, the IRS has increased the annual contribution limit to the 401(k) plan to $23,500, up from $23,000 in 2024. Additionally, workers aged 50 or older can make an additional catch-up contribution of $7,500. For those between 60 and 63 years old, this additional limit increases to $11,250, thanks to the SECURE 2.0 Act.

SSA lends you a hand with the IRS: watch the limit: what to do if you exceeded it?

Exceeding these limits can result in tax penalties and administrative complications. It is essential to verify your contributions to avoid excesses that could affect your financial health.

If you have contributed beyond the established limit, the IRS recommends using the Interactive Tax Assistant (ITA), an online tool that guides you step by step to identify and correct excessive contributions. This tool provides clear and personalized instructions to solve the situation.

To use the ITA, visit the IRS page and search for the Interactive Tax Assistant, enter details about your 401(k) plan contributions, including amounts and dates. The assistant will analyze the information and indicate if you have exceeded the contribution limits. If an excess is detected, contact the plan administrator and request a corrective distribution.

Be alert, it's important to correct it and you still have plenty of time

Not correcting excessive contributions can have significant tax consequences. Excesses not withdrawn before April 15 of the following year may be taxed twice: once at the time of contribution and again at the time of distribution.

Additionally, the plan could lose its favorable tax status, affecting both the employer and the employee. Using the Interactive Tax Assistant allows you to identify and correct these errors in time, avoiding penalties and ensuring the integrity of your retirement plan.

How does this tool benefit you?

The Interactive Tax Assistant is a joint initiative of Social Security and the IRS to provide online tools that facilitate the management of retirement plans. This function allows you to verify and correct contributions to the 401(k) plan, providing peace of mind to millions of workers. Additionally, it is a free, confidential, and easy-to-use tool, which increases taxpayer satisfaction by offering an accessible and effective solution.

Don't get distracted, SSA makes it easy for you

If you have contributed more than allowed to your 401(k) plan in 2025, don't wait any longer. Use the IRS Interactive Tax Assistant to correct the excess and avoid potential penalties.

This tool is a valuable aid that reflects the commitment of Social Security and the IRS in facilitating citizens' financial planning. For more information and to access the Interactive Tax Assistant, visit the official IRS Internal Revenue Service page.