Retired self employment tax
Client operated an manufacturers rep business. Part of his comp was Non-qualified Deferred comp. During working years he paid max self employment tax on his earnings which always exceeded the cap. Now retired his deferred comp comes as earned income and he is still paying max self employment tax on this comp.
If this was earned during working years it was then all above the cap-why when deferred would he be paying as if it were all under the cap?
Permalink Submitted by Dan Zaehring on Mon, 2022-07-04 03:05
While outside the scope of an IRA discussion board, non-qualified deferred comp plans are often complex and require the expertise of a professional familiar with their taxation. Generally the FICA is due when the comp is “earned” not when it is eventually received.