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Section 409A of the United States Internal Revenue Code regulates nonqualified deferred compensation paid by a "service recipient" to a "service provider" by generally imposing a 20% excise tax when certain design or operational rules contained in the section are violated. Service recipients are generally employers, but those who hire ...
Unfunded deferred compensation plans offer very flexible benefit structures compared to qualified retirement plans, even after the enactment of new Internal Revenue Code IRC §409A (discussed below). Account-based plans: Elective deferrals are credited to an account in the participant's name along with any company contributions (such as ...
Federal income tax rates change on a regular basis. If an executive is assuming tax rates will be higher at the time they retire, they should calculate whether or not deferred comp is appropriate. The top federal tax rate in 1975 was 70%. In 2008, it was 35%. If an executive defers compensation at 35% and ends up paying 70%, that was a bad idea.
If you file a federal tax return as an individual, you could pay income tax on up to 50% of your Social Security benefits (assuming a combined income of $25,000 to $34,000).
In the US, Internal Revenue Code section 409A regulates the treatment for federal income tax purposes of “nonqualified deferred compensation”, the timing of deferral elections and of distributions. [26]
Section 179 depreciation deduction; Internal Revenue Code section 183; Internal Revenue Code section 212; Internal Revenue Code section 355; 401(a) 401(k) Roth 401(k) 403(b) SIMPLE IRA; Internal Revenue Code section 409A; 457 plan; 475 fund; 501(c) organization; 501(c)(3) organization; Omega International Associates; 501(h) election; 527 ...
For regular tax purposes, ... of deferred compensation Congress enacted in 2004 in the wake of the Enron scandal known as Section 409A of the Internal Revenue Code. ...
In October 2004, section 409(a) of the tax code was added by the American Jobs Creation Act of 2004, which set rules requiring the strike price of the option grant to be at least the fair market value, giving rise to the term 409(a) valuation.