Profit Sharing – Qualified and Unqualified, Part 2

Employer's Tax Issues: The Company Receives Deduction Profit Share Profit Sharing Trust

Tax Issues To Employees: The amount paid for his account is not taxable, whether his interests are confiscated or impunity. The full amount of tax is invested by the trustee. These donations can be merged, or employees may be allowed to indicate their contributions on behalf of them. Some of the plans allow you to withdraw some of your share of funds during work, due to difficulties, and so on. [19459] [1945930]

This is levied as an ordinary income, and if you withdraw before 59 1/2, a fine of 10% is imposed unless you have made a contribution to the after-tax fund.

If your employment relationship is over, the profit-sharing fund (plus your employer's other eligible programs, such as 401 (k), set the Benefit Pensions Scheme) will be paid to you in a taxable year (1945900) [1945900]

o Your own after-tax contribution is exempt from tax

o If you were 50 years old (born before 1936) by 1986, your plan before 1974 could be taxed at a rate of 20% or a ten-year income rule based on the 1986 tax rate.

o Taxable portion of participation after 1975 If you are a participant for at least five years, you are bound by the above average rule

o If you receive your company's stock as part of the distribution, The unrealized appreciation of the stock is not included in the taxable amount. It will not be taxed until you sell the stock

o until December 31, 1999, if you did not reach 50 years before 1986, the favorable disposable treatment was limited to a one-time election five-year average After you have reached the age of 59 1/2. After 1999, this option is no longer available.

o If none of the above applies to you, the entire one-time total distribution will be included in your taxable income for that year. The peak of your taxable income may raise your adjusted gross income so high that you will be in higher taxes.

o It is better if you were born after 1935 – consider converting your money into an IRA. If you transfer (minus your own) into your personal retirement account when you retire or leave, you can postpone the one-time tax. Before you withdraw money from IRA, your fund's income will be tax-free. You can withdraw from your IRA at age 59 or use early distribution before 59 1/2, which is part of a series of substantially equal regular payments, at least annually for your life or joint life expectancy or joint life The person and the designated beneficiary. You can still wait 70 1/2 years, at this point, you can choose some form of annuity payment. Funding from IRA will be taxed to the payee. Early withdrawal of 53 years prior to the absence of the above conditions (except death or disability) resulted in a non-cancelable penalty of 10% before the general income tax and possible 20% tax deduction