Skip to main content

View Diary: According to USA Today's logic, you should ask your boss for a pay cut (122 comments)

Comment Preferences

  •  Consider FICA and 409A (2+ / 0-)
    Recommended by:
    Marie, RethinkEverything

    If you are over the FICA limit (currently about 106,000) near the end of the year, you can save the social security portion of the tax.  That might offset, or partially offset, the higher marginal rate.

    Spreading a payment over two years is known as bracket-splitting.  However, doing so can implicate section 409A, which imposes a penalty tax of 20% on certain deferred compensation arrangements.  It is a very technical section of the tax law, with lots of ways to mess up.  So any such arrangement should be scrutinized by a tax lawyer or accountant to ensure that the requirements of 409A are complied with.

    "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

    by Old Left Good Left on Tue Sep 06, 2011 at 05:18:12 PM PDT

    [ Parent ]

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site