Deferred Compensation
If deferred Compensation that is not subject to FICA or Medicare taxes; can a Roth or Traditional IRA contribution be made based on the deferred comp income???
If deferred Compensation that is not subject to FICA or Medicare taxes; can a Roth or Traditional IRA contribution be made based on the deferred comp income???
Permalink Submitted by mk foss on Thu, 2010-03-04 17:10
Deferred compensation is subject to FICA and Medicare taxes in the year that it becomes nonforfeitable. It is not considered earned income in the later year when it is paid out and cannot support any type of retirement contribution.
Permalink Submitted by Alan Spross on Thu, 2010-03-04 19:26
If client has a W-2 reporting DC in Box 11, the taxable compensation for IRA contribution purposes is the Box 1 figure LESS the amount in Box 11.