Correct title in the Deferred Compensation Plan

Aug 6th, 2022
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How to correct title in the Deferred Compensation Plan

5 out of 5
51 votes

for me it like I said it makes me a little nervous um because I think about retirement now being you know a a um a public servant sure your your latter years of life look different financially where you have to create what that looks like have you thought about what life youre in your 20s have you thought about what life looks like financially in your 50s and 60s yeah like the retirement plan right so you know yall say rapper and producer podcast producer I am that but I feel like my my best GID is the real estate yeah I forgot that you know so I bought a house off hustling off my gigs and now I rent out rooms in my house and Im saving up that money so that I can renovate my shed and turn that into another house eventually buy another house you know so thats where I really see this going um real estate is where its really I see a lot of income for me and but even thats scary me and my mom were just talking about it Im like well what if nobody you know people are broke times hard

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An employer is required to report such amounts as wages paid on line 2 of Form 941, Employers Quarterly Federal Tax Return, and in box 1 of Form W-2. An employer must also report such amounts as 409A income in box 12 of Form W-2 using code Z.
A deferred compensation plan withholds a portion of an employees pay until a specified date, usually retirement. The lump sum owed to an employee in this type of plan is paid out on that date. Examples of deferred compensation plans include pensions, 401(k) retirement plans, and employee stock options.
Deferred compensation is not considered taxable income for employees until they receive the deferred payment in a future tax year.
IRC 457(b) Deferred Compensation Plans.
A deferred compensation plan is another name for a 457(b) retirement plan, or 457 plan for short. Deferred compensation plans are designed for state and municipal workers, as well as employees of some tax-exempt organizations.
In terms of accounting, deferred compensation is typically recognized as an expense by the company in the period in which the employee performs the service, and it is accrued as a liability on the balance sheet until it is paid out.
Expert-Verified Answer. The statement that is not correct regarding Section 457 plans is they may allow for special catch-up contributions in the participants last three years of employment prior to retirement.
Accounts payable represent a liability, or an amount you owe. Liabilities are increased by credits. For accurate accounting books, you must credit your accounts payable the amount of the deferred compensation. This creates a record representing that you still owe the employee money.

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