Randy Watson Posted November 2, 2007 Posted November 2, 2007 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.
Guest KennyH Posted November 2, 2007 Posted November 2, 2007 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?
Randy Watson Posted November 2, 2007 Author Posted November 2, 2007 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? Order matters if there isn't enough comp to cover all of the elections.
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