Federal taxation of deferred compensation plans
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Federal taxation of deferred compensation plans

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Published by Commerce Clearing House in Chicago, Ill. (4025 W. Peterson Ave., Chicago 60646) .
Written in English



  • United States.


  • Deferred compensation -- Taxation -- Law and legislation -- United States.,
  • Employee fringe benefits -- Taxation -- Law and legislation -- United States.

Book details:

Edition Notes

Includes bibliographical references.

Statementby Camilla E. Watson and Michael H. Hoeflich.
ContributionsHoeflich, Michael H.
LC ClassificationsKF6379 .W37 1989
The Physical Object
Paginationvii, 561 p. ;
Number of Pages561
ID Numbers
Open LibraryOL2231340M
LC Control Number89085768

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Get this from a library! Federal taxation of deferred compensation plans. [Camilla E Watson; Michael H Hoeflich].   Taxation of eligible deferred compensation. Distributions from an eligible deferred compensation plan are taxed at 30 percent as payments are made. The 30 percent tax is withheld from the payments and sent to the IRS by the payor. The remaining amount of the payment is sent to you, the covered expatriate. Ineligible deferred compensation. IRC (b) Deferred Compensation Plans. Plans of deferred compensation described in IRC section are available for certain state and local governments and non-governmental entities tax exempt under IRC Section They can be either eligible plans under IRC (b) or ineligible plans under IRC (f). This article focuses on the federal income tax consequences and does not address state income taxation. This article also does not address the rules for long-term contracts under Sec. or the rules for the treatment of deferred revenue in tax-deferred transactions. 2 See Sec. (b), as amended by TCJA §(a). 3 Sec. 61(a).

Generally speaking, the tax treatment of deferred compensation is simple: Employees pay taxes on the money when they receive it, not necessarily when they earn it. For example, say your employer provides you $80, a year in salary and $20, a year in deferred compensation. Editor: Kevin D. Anderson, CPA, J.D. Many companies find stock-based compensation is a great way to attract and retain key employees. Over the past year, many employers focused primarily on changes from the law known as the Tax Cuts and Jobs Act (TCJA), P.L. Now that the TCJA dust has settled a bit, it may be a good time for employers to go back to basics and .   You are taxed on the compensation when you actually receive it. This can be when you retire or meet any other triggering event allowed under the plan (e.g., disability). Income tax withholding. The company may book the tax effect of the increase in the deferred compensation account, but since it is not currently deductible it increases the deferred income tax asset. (3) Paying out the plan participant with cash and closing out the Deferred Compensation Liability account.

] TAXATION OF DEFERRED COMPENSATION employee,1 these plans must be available to a broad spectrum of employees, 2 and they must not "discriminate in favor of highly compensated employees."13 These conditions make clear that, in creating the qualified plan rules, Congress intended a limited subsidyAuthor: Ethan Yale, Gregg D. Polsky. A deferred compensation retirement plan lets employees contribute funds to their accounts and also defer the tax payments on that compensation. The contribution limit for a (k) plan .   Using a deferred-compensation plan can be an excellent tax strategy but not all deferred compensation plans are the same. This week, I try to explain why one reader's tax bill was higher than. Nonqualified Deferred Compensation Plans. Why Administration Matters. By: Howard D. Stern, FSA. Vice President & Actuary. The Pangburn Company. HOWARD D. STERN, FSA is Vice President and Actuary with the Pangburn Company, a privately owned, fee-for-service, nonqualified benefit plan TPA, operating on a national Size: 76KB.