Personally owned ROTH IRA, funded by employer
Can I have some details on a ROTH IRA personally owned, funded by owner AND their employer? The employer can tax deduct the contribution as a business expense? Does the employee have to count this ROTH contribution as income? Employer tax deduction…as a salary where employment tax is involved? Or tax deduction…like a car? Last…employer can discriminate? meaning they can fund one person…and no one else? Thanks for this valuable format…..
Permalink Submitted by David Mertz on Sat, 2018-02-24 00:04
Roth IRAs are personal accounts, so contributions to a Roth IRA are entirely contributions by the employee, regardless of who actually deposits the money into the account. Any amount deposited by the employer must be included as compensation reported in boxes 1, 3 and 5 of the employee’s W-2. As with all compensation paid to the employee, the compensation is a deducible expense of the employer. Since it is simply part of the compensation paid to the employee and not a contribution made under retirement plan of the employer, no antidiscrimination regulations apply. As compensation paid to the employee, income tax and FICA withholding apply.