UpstateNYUPSer(Ret)
Well-Known Member
My son gets a full match if he puts in 4% and an additional 1% if he puts in 6%. He is setting aside 10% which means he and his employer are contributing a combined 16%, with the 6% bring unearned income.
It Could Always Be Worse
- Thread starter Oldfart
- Start date
My son gets a full match if he puts in 4% and an additional 1% if he puts in 6%. He is setting aside 10% which means he and his employer are contributing a combined 16%, with the 6% bring unearned income.
MAKAVELI
Well-Known Member
You are missing the point. He would not get the match if he didn't "WORK" for his employer. Hence it is NOT FREE MONEY.
Oldfart
Well-Known Member
I have been having to use the standard deduction for years. I would have to disagree with that argument. There has to be something out there for people with no home interest and a minimum amount of deductions. For someone with no job and 4 kids to get a 4k tax refund is total garbage. Get ride of earned income.
Oldfart
Well-Known Member
He can work for his employer and not be in the 401k and not get that money. Or he can contribute 6% and get 3.5% for the match. That is FREE money. It is a term used by financial advisors. Maybe not by people who must have something to argue about. Once again, it is a benefit, not compensation.
It will be fine
Well-Known Member
Again you're arguing semantics
Simple Definition of compensation
: something that is done or given to make up for damage, trouble, etc.
: something good that acts as a balance against something bad or undesirable
: payment given for doing a job
Your argument is idiotic. Your employer only contributes to your pension fund because you work there. It is payment given for doing a job.
Now are you telling me that you are receiving a 1099 misc every year showing the amount that was deposited in your account and your are paying federal income tax on the amount in the year it was deposited.? Roth IRA's work in a similar fashion. However if it's a qualified retirement plan it will be taxed either going in or coming out. Why? The money is considered to be a deductible operating expense to X. So if you believe that you are NOT going to be paying taxes you are in for a big surprise. If you don't believe that then why are retirement plans depending on the size of the withdrawal are required to withhold taxes.? Furthermore I never said that it was taxable at the time of deposit. I said it was taxable at the time of WITHDRAWAL.
MAKAVELI
Well-Known Member
Benefits are part of our compensation package. Even FedEx defines it as so. Sorry but nothing I've earned is FREE.
Oldfart
Well-Known Member
You are totally confused as to what the conversation consisted of. I can't seem to catch you up to speed. Have you been drinking tonight?
Oldfart
Well-Known Member
The IRS doesn't consider it compensation. That is the important part. They did not tax jump seat when we had that. They do not tax the uniforms you are given, they do not tax the 401k or the portable contributions. It is not compensation according to the IRS.
Check the Summary Plan description. If the Summary Plan Description identifies the plan as a deferred compensation retirement plan you will pay taxes on what you withdraw from it during the course of a given tax year. Most plans state that the earliest you can begin WITHDRAWALS from the plan is age 59.5 with certain exemptions in case of disability. Portable or Traditional if the summary plan description says that is a tax deferred pension plan the benefits are taxable for the recipient.
dezguy
Well-Known Member
It does, actually. My stub shows the amount I put in and the amount FedEx puts in. The total amount for the year shows up on my T-4 under RRSP contributions and I'm allowed to use the portion I contributed as a deduction.
The CRA considers it non taxable income so long as it isn't withdrawn before your retirement, at which time, they will be taxed at the proper income bracket.
Oldfart
Well-Known Member
LOL You must have been drinking. Deposits into your pension plan are not reported compensation. I am not worried about taxes on withdrawals. I am not retired yet.
You are exactly correct. It does not go on your W-2 because it's deferred compensation. But when you start taking withdrawals you will receive a 1099 stating how much was withdrawn .It will state the gross amount and what portion is taxable . Most of the time it's 100%. Rather than placing all of your pay on your W2 they have these plans which saves them and you FICA taxes. (Social Security Medicare).
Oldfart
Well-Known Member
Our W2 subtracts your 401k contribution in the proper columns and it is never entered on our year end tax returns. The portable is not on any pay stub or tax forms.
dezguy
Well-Known Member
We have to enter it every year on our return and as I said, it is clearly marked on our T-4 and shows up every week, as an amount the individual contributes and the amount the company contributed for that pay period.
A person can use the higher of the standard deduction or itemized deductions on Schedule A. However if you noticed the types of deductions a person can use of SchA has been disappearing over the years.The reason. The IRS simply doesn't have the manpower to audit those small deductions anymore and the general rule is that if they believe that there's not at least $1000 in additional tax to obtain they don't bother. That is in part the reason why the standard deduction has been increased over the years. As for the EIC it is meant to give low income taxpayers their taxes back and a little more to help them. Clearly designed to help people working low pay but important jobs to not quit and go on welfare. It's a good deal for small business employers whose jobs would likely go wanting without the EIC
Oldfart
Well-Known Member
If you are debt free and have no mortgage, the chances of beating the standard deduction are slim. My charitable donations and property taxes are about all I have. If they did away with the standard deduction, I would be in trouble. I still disagree with giving people tax refunds that didn't even pay taxes or giving them more of a refund than the taxes they did pay.
I would have to agree with you on the basis of the fact that the EIC is a sneeky little form of corporate welfare because EIC has become a direct taxpayer funded form of wage subsidation. The hard fact is that the people receiving EIC simply wouldn't make it on the low wage jobs they are working without EIC. When people are being paid the kind of wages they can make it on the EIC phases out.
MAKAVELI
Well-Known Member
Right here on FedEx's website. It's part of our COMPENSATION PACKAGE.
Compensation and Rewards
FedEx offers an attractive and comprehensive package of pay, benefits and quality of work/ life programs. Examples of these programs include:*
Salary IncreasesSalary increase based on individual performanceVariable PayIncentives to reward individual and team contributionsTuition AssistanceSubsidy for continuous learning and educationPaid Time OffPaid annual leave, wedding leave, maternity leave and paternity leaveHealth Care ProgramMedical coverage and dental coveragePensionFinancial security in retirementReduced Shipping RateExclusive discounts for personal shippingDiscounted TravelDiscounts on air tickets
* Provision varies by country
UpstateNYUPSer(Ret)
Well-Known Member
Semantics.
