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Key Employee
Key employee, in U.S. Internal Revenue Service (IRS) terminology, is an employee classification used when determining if company-sponsored qualified retirement plans, including 401(a) defined benefit plans and 401(k) In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodic employee contributions come directly out of their ...s, are considered "top-heavy" or, in other words, weighted towards the company's more highly compensated individuals. A key employee is defined by the IRS as an employee, either living or dead, who meets one of the following three criteria: *An officer making over $175,000 in 2018 or $180,000 in 2019 (the income threshold is indexed by the IRS and may increase each year); *A 5% owner of the business (defined as one who either owns more than 5% of the business, or is credited with more than 5% ownership of the business t ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Internal Revenue Service
The Internal Revenue Service (IRS) is the revenue service for the Federal government of the United States, United States federal government, which is responsible for collecting Taxation in the United States, U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory tax law. It is an agency of the United States Department of the Treasury, Department of the Treasury and led by the Commissioner of Internal Revenue, who is appointed to a five-year term by the President of the United States. The duties of the IRS include providing tax assistance to taxpayers; pursuing and resolving instances of erroneous or fraudulent tax filings; and overseeing various benefits programs, including the Affordable Care Act. The IRS originates from the Commissioner of Internal Revenue, a federal office created in 1862 to assess the nation's first income tax to fund the American Civil War. The temporary measure funded over a fifth of the Union's war expens ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Qualified Retirement Plan
A retirement plan is a financial arrangement designed to replace employment income upon retirement. These plans may be set up by employers, insurance companies, trade unions, the government, or other institutions. Congress has expressed a desire to encourage responsible retirement planning by granting favorable tax treatment to a wide variety of plans. Federal tax aspects of retirement plans in the United States are based on provisions of the Internal Revenue Code and the plans are regulated by the Department of Labor under the provisions of the Employee Retirement Income Security Act (ERISA). Types of retirement plans Retirement plans are classified as either defined benefit plans or defined contribution plans, depending on how benefits are determined. In a defined benefit (or pension) plan, benefits are calculated using a fixed formula that typically factors in final pay and service with an employer, and payments are made from a trust fund specifically dedicated to the plan ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
401(a)
In the United States, a 401(a) plan is a tax-deferred retirement savings plan defined by subsection 401(a) of the Internal Revenue Code. The 401(a) plan is established by an employer, and allows for contributions by the employer or both employer and employee. Contribution amounts, whether dollar-based or percentage-based, eligibility, and vesting schedule are all determined by the sponsoring employer. These plans are available to some employees of the government, educational institutions, and non-profits, and their funds can be rolled over to a different qualified retirement plan, such as a 401(k) or IRA, when changing jobs. Employer contributions are mandatory, while employees are not necessarily required to contribute to the plan. Early withdrawals from the plan are permitted, but they may be subject to a penalty. See also * 401(k) * 403(b) * 457(b) and 457(f) plans * Individual retirement account * List of finance topics * Taxation in the United States * Thrift Savings Plan ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Defined Benefit Plan
Defined benefit (DB) pension plan is a type of pension plan in which an employer/sponsor promises a specified pension payment, lump-sum, or combination thereof on retirement that depends on an employee's earnings history, tenure of service and Ageing, age, rather than depending directly on individual investment returns. Traditionally, many governmental and public entities, as well as a large number of corporations, provide defined benefit plans, sometimes as a means of compensating workers in lieu of increased pay.Lemke and Lins, ''ERISA for Money Managers'', §1:1 (Thomson West, 2013). A defined benefit plan is 'defined' in the sense that the benefit formula is defined and known in advance. Conversely, for a "defined contribution plan, defined contribution retirement saving plan," the formula for computing the employer's and employee's contributions is defined and known in advance, but the benefit to be paid out is not known in advance. In the United States, specifies a defined ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
401(k)
In the United States, a 401(k) plan is an employer-sponsored, defined-contribution, personal pension (savings) account, as defined in subsection 401(k) of the U.S. Internal Revenue Code. Periodic employee contributions come directly out of their paychecks, and may be matched by the employer. This pre-tax option is what makes 401(k) plans attractive to employees, and many employers offer this option to their (full-time) workers. 401(k) payable is a general ledger account that contains the amount of 401(k) plan pension payments that an employer has an obligation to remit to a pension plan administrator. This account is classified as a payroll liability, since the amount owed should be paid within one year. There are two types: traditional and Roth 401(k). For Roth accounts, contributions and withdrawals have no impact on income tax. For traditional accounts, contributions may be deducted from taxable income and withdrawals are added to taxable income. There are limits to contribut ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Key Person Insurance
Key person insurance, also called keyman insurance, is an important form of business insurance. There is no legal definition of "key person insurance". In general, it is an insurance policy taken out by a business to compensate that business for financial losses that would arise from the death or extended incapacity of an important member of the business. To put it simply, key person insurance is a standard life insurance or trauma insurance policy that is used for business succession or business protection purposes. The policy's term does not extend beyond the period of the key person’s usefulness to the business. Key person policies are usually owned by the business and the aim is to compensate the business for losses incurred with the loss of a key income generator and facilitate business continuity. Key person insurance does not indemnify the actual losses incurred but compensates with a fixed monetary sum as specified in the insurance policy. Many businesses have a key pe ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
United States Tax Law
The United States has separate Federal government of the United States, federal, U.S. state, state, and Local government in the United States, local governments with taxes imposed at each of these levels. Taxes are levied on income, payroll, property, sales, Capital gains tax in the United States, capital gains, dividends, imports, estates and gifts, as well as various fees. In 2020, taxes collected by federal, state, and local governments amounted to 25.5% of GDP, below the OECD average of 33.5% of GDP. Income tax in the United States, U.S. tax and transfer policies are Progressive tax, progressive and therefore reduce effective income inequality in the United States, income inequality, as rates of tax generally increase as taxable income increases. As a group, the lowest earning workers, especially those with dependents, pay no income taxes and may actually receive a small subsidy from the federal government (from child credits and the Earned Income Tax Credit). Taxes fall m ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
