136C Notes 1_13_11

136C Notes 1_13_11 - 136C Notes 1/13/11 Defined...

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136C Notes 1/13/11 Defined Contribution Pension Plans *Low cost *Saves income taxes >When you PV it back, the effecitive tax rate Is LOW *Easy accounting and taxes *Journal Entry:: *Still subject to social security tax *Loyalty… it can fluctuate a lot up and down, changes work ethic, stock mkt inf. Pension Expense xx Cash xx ((super easy and straightforward)) Defined Benefit Plan Some things that are the same as defined contribution: *Defer income taxes *There are 2 income taxes we have in this country. . >>Regular and Social Security tax that is trying to fund that weakened system that has been raided over the past years… it is now suffering. *No SOCIAL SECURITY TAX! Not subjec to it now, or at the end! >>15.3% of taxes saved each time. 7.65 percent *Counter issue to this, however… higher cost of administration. * HARD ACCOUNTING. >>You don’t know what can happen… people can die the day after they retire, or they can retire at 55 and live til they are 110 years old! >>The accountants are not that good at guessing what this is
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This note was uploaded on 02/22/2012 for the course ACCT 1320 taught by Professor Staff during the Spring '11 term at Texas State.

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136C Notes 1_13_11 - 136C Notes 1/13/11 Defined...

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