This double tax is created because the Form 1040 filing instructions for 2023 require deferred compensation payments reported in box 11 of Form W-2 to be reported on an employee’s Form 1040 as ...

A deferred compensation plan withholds a portion of an employee’s pay until a specified date, usually retirement. The lump sum owed to an employee in this type of plan is paid out on that date ...

Qualified deferred compensation plans — 401(k)s, profit-sharing plans, incentive stock options, pensions — are protected by the Employee Retirement Income Security Act of 1974, which sets ...

Some NQDC plans allow executives to defer certain equity awards and hold the shares in the deferred compensation plans. There may be potential restrictions on selling the company’s stock. 4.

Deferred compensation is a way for employees to reduce their tax burden while ensuring their economic security in their golden years. Deferred compensation plans with a long vesting period are ...

If they were to put another $500k in the deferred comp plan, they would have a total of $1.5 million in this plan, which seems like a lot. ...

Like a 401(k) plan or traditional IRA, the money placed in a deferred compensation plan grows in a tax-deferred way. You can exclude the contributions made during the year from your taxable income.

A nonqualified deferred compensation (NQDC) plan is an arrangement that an employer and employee agree to where the employer accepts to pay the employee sometime in the future. Executives often ...

With deferred compensation, you might say, “Keep $50,000 of that and pay me in five years.” It sits in a special account, growing without taxes eating at it—yet.