Full Version: Order of Withholding
Can anyone point me to a good article or some commentary on the order of withholding with regard to benefits? For example, what comes out of a participant's compensation first: (1) 401(k) deferral; (2) Section 125; (3) income tax; (4) nonqualified deferrals etc.... Thanks.
Why would the order matter?
Taxes are calculated on taxable income. Plan compensation is defined so it doesn't affect benefits. The ultimate net paid is the same. What does "order" effect?
Taxes are calculated on taxable income. Plan compensation is defined so it doesn't affect benefits. The ultimate net paid is the same. What does "order" effect?
QUOTE (leftovers @ Nov 2 2007, 04:00 PM) 
Why would the order matter?
Taxes are calculated on taxable income. Plan compensation is defined so it doesn't affect benefits. The ultimate net paid is the same. What does "order" effect?
Taxes are calculated on taxable income. Plan compensation is defined so it doesn't affect benefits. The ultimate net paid is the same. What does "order" effect?
Order matters if there isn't enough comp to cover all of the elections.
This is a "lo-fi" version of our main content. To view the full version with more information, formatting and images, please click here.