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No catch ups for sEP SEPS are fully vested are tax deductibel to the employee and not taxabel to employee until withdrawn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