TaxTips

Continuously looking for ideas to save your tax dollars


Keeping our Client's abreast of new tax laws and providing them with possible ideas on ways to reduce their tax burden is one of our goals.   We offer this through this continual update of new tax laws and providing some TAX TIPS which may offer savings ideas.  We present these ideas; however, please consider all facts in your case, and talk with your tax representative,  before implementing any of these these ideas.

      Nonqualified Deferred Compensation Plans

The basic premise behind nonqualified arrangements is to allow executives to defer current income to later tax years.  Congress, though, viewed some of these arrangements as going too far in giving executives access to deferred compensation.  So, AJCA tightens up the rules regarding when income deferral will be allowed.  The major change will make it much more difficult for a participant to take an early distribution from the plan without incurring interest and a penalty.  It is essential that employers and participants review their nonqualified deferred compensation arrangements to ensure the new rules are met.  For more details about these new rules and their effect on your plan, contact our office.

 

 Copyright   1987 - 2010 A. Harold Davis, CPA