“Employee Expenses and Deferred Compensation”

“Employee Expenses and Deferred Compensation”

Both nondeductible contributions to a traditional IRA and contributions to a Roth IRA are similar in the sense that neither provides a tax deduction at the date of contribution. Which of the two types would be most advantageous to taxpayers and why?

Your client is about to establish his own business and hires at least 10 employees. They ask you for advice concerning establishing a qualified versus a non-qualified retirement plan. What do you advise your client? Would your answer change if you were a potential employee? Why or why not?

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Both nondeductible contributions to a traditional IRA and contributions to a Roth IRA are similar in the sense that neither provides a tax deduction at the date of grant. Which of the two types would be most advantageous to taxpayers and why? With a Roth IRA, there is no in advance tax cut, yet you don’t need to pay the charge on withdrawals in retirement. That is the inverse of a conventional IRA, which may enable you to deduct at any rate some portion of your commitments on the off chance that you qualify yet expects you to pay salary charge on cash you pull back in retirement.

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