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Redact Deferred Compensation Plan

Redact Deferred Compensation Plan

Aug 6th, 2022

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Straightforward guide on how to Redact Deferred Compensation Plan

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Redact Deferred Compensation Plan and save changes.
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How to Redact Deferred Compensation Plan

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Got questions?

Below are some common questions from our customers that may provide you with the answer you're looking for. If you can't find an answer to your question, please don't hesitate to reach out to us.

How do I record deferred compensation?

The journal entry is simple. Debit Deferred Compensation Liability for $100,000 (this will zero out the account balance), and credit Cash for $100,000. Taxes on the payment will be paid at this point (by both the corporation and the employee).

What are the disadvantages of non qualified deferred compensation plans?

The plans carry some inherent risk for the employees in that the deferred payments are unsecured and not guaranteed. So if the organization faces bankruptcy and creditor claims, the employees may not receive their promised funds. (In contrast, qualified plans such as 401(k)s are protected from bankruptcy creditors).

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