Tax Accounting Information in Business Planning IP.docx - Taxation and Business Decisions Tax Accounting Information in Business Planning Chrisie

Tax Accounting Information in Business Planning IP.docx -...

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Taxation and Business Decisions Tax Accounting Information in Business Planning Chrisie Jefferson Unit 1 Individual Project August 17, 2019 Dr. Ralph Palumbo
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[SHORTENED TITLE UP TO 50 CHARACTERS] 2 Abstract Implementing a 401 K program will help Jefferson Industrial Machining be able to deduct the cost of operating this program, as a business expense on their corporate income taxes. There are 401 K limits and special treatment for the three most highly compensated officers, that we will get into further into later. Jefferson Industrial will match up to 50% of the employees’ contribution up to 6%. Jefferson Industrial’s estimated annul contribution will be $300,000 and the employee turnover costs and improved performance with a savings of $70,000.
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[SHORTENED TITLE UP TO 50 CHARACTERS] 3 Tax Accounting Information in Business Planning I will explain the 401K limits and special treatment for highly compensated employees. I will attempt to analyze the program and see whether the program is helping Jefferson Industrial save money or will it cost Jefferson Industrial money. 401 K limits and special treatment for highly compensated officers Some companies contribute their own stock into 401 (k) plans. This imposes risk on the employees because much of his or her wealth is then concentrated in the firm. If the firm fails, not only is the employee out of work, but his or her 401 (k) investment in the company stock loses much of its value (Scholes, Wolfson, 2005). Jefferson Industrial Machine, Inc. has an estimated annual contribution of $300,000, which is only half of the employees’ contribution of $600,000 of up to 6% in total. If the employees of Jefferson Industrial give a total contribution of $1,000,000, then take 6% of that $1,000,000 and it will be $600,000 and then the $600,000 is the
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  • Spring '16
  • RalphPalumbo
  • Taxation in the United States, Jefferson Industrial

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