Unit 24

401k plan plans

401k plan loans allow for a max of 50% of the particiapnt's vested share or whichever is smaller must be apid back in 60 months or 5 yrs

IRAS

6k tax decutible 12k per couple

IRAs (Individual Retirement Accounts)

IRA ROTH IRA SEP-simplified employee pension plans

Economic growth and tax relief reconicialtion act EGTTRA

allows for additional catch up of 1k per yr anyone with earned income below 72 can contirbute ot an IRA

not comp

c[aital gains omterest and dividends pension or annuity income child support passive income from DPPs alimony from post dec 2018 divrorces

withdrawls SEP and traditonal IRAs

can being up t april 1st after turn 72 amd distibutuons before and after 59 and 72 may incur penalties doesnt apply is death disbaility first time purchase of primary reisdnec eup to 10k qualfieid expenses or cetain medicale pesnses

Non spouse benfiicary

can't rollover into their own IRA they can take the cash now all taxable income at withdrawal cash out in 5 yrs can take it otu in any portions they want take out the min distr over beenfiicarys lifetimes FBO must be establsihed in the deased account owners name FBO dec 31st after their death msut have first RMD or take RMS of odlest beenfiicaty

Qualified plan

employer sponsored plan

nonqualified

employer sponsored plan such as a deferred compensation plan, no tax adv ntil recieved when in lwoer tax bracket plan can disrciminate

nondeductible contributiopns

made with after tax dollars do grow tax deferred but no tax beenfit

deductible contributions

made with pre tax

Qualified ny itself

means meand contr are rpetax and eanrigns are tax deferre duntil withdrawal

ELigibilty of a SEP IRA

must be atleast 21 yrs of age and employed 3/5 last yrs and revieda tleast 600 in comp in the current yr it allows alle ligbel emploeyes to particiapte sEP allows employer to contirbute up to 25% oof employess slary tot he employees SEP IRA each year max 56 k per emp must have same percentgage contirbutuoion for each employee as wellas employer No catch ups for sEP SEPS are fully vested are tax deductibel to the employee and not taxabel to employee until withdrawn

NQDC

nonqualfiied defered comp defer cmp for higher payout at retirmement plan can discriminate

Qualified plans contrib tax deductible plan approved by the IRS plan cant discrimate subject to eRISA ax on acumualton deferred all withdrawls taxed plan is a trust

nonqualifed contr are not tax deuctibel plan doesnt need IRS approval plan can discrimate not subject to eRIDS tax on acumm is deferred excess over cost base is taxed plan in not a trust

IRA comp

wagees aalsarues tips commisisons bonuses self emp income notnaxable combat pay alimony pre 2019 divorces