SS & Medicare on Pension Funds

#2 10-24-2003, 06:30 AM

Victor Roberts <Vic[at]Lighting-Research.com> wrote:

- quote -

> I would like to confirm something. It is my understanding
> that when a company makes contributions to a (non-salary
> reduction) SEP (and probably other forms of pension plans)
> these funds are not subject to either the company or
> employee portions of the Social Security or Medicare tax.
> And when the funds are withdrawn at retirement (assuming
> standard conditions are met) they are also not subject to
> either Social Security or Medicare tax. Is this correct?

Company contributions, or "match", are neither taxable nor
subject to SS/MC when made. Future withdrawals from the
pension plan (defined benefit or defined contribution) are
taxable, but not subject to SS/MC.

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#1 10-22-2003, 03:56 AM

SS + MC tax is charged on 401K plan contributions, but not
when you withdraw. It is also charged outside of the
contribution, so if you contribute $10,000, another $765 has
been deducted from your paystub.

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

10-20-2003, 01:12 AM

Victor Roberts wrote:

- quote -

> I would like to confirm something. It is my understanding
> that when a company makes contributions to a (non-salary
> reduction) SEP (and probably other forms of pension plans)
> these funds are not subject to either the company or
> employee portions of the Social Security or Medicare tax.
> And when the funds are withdrawn at retirement (assuming
> standard conditions are met) they are also not subject to
> either Social Security or Medicare tax. Is this correct?

KEE.... reckt!

Cheer$,
Harlan Lunsford, EA in LA

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

#-1 10-18-2003, 03:08 AM

I would like to confirm something. It is my understanding
that when a company makes contributions to a (non-salary
reduction) SEP (and probably other forms of pension plans)
these funds are not subject to either the company or
employee portions of the Social Security or Medicare tax.
And when the funds are withdrawn at retirement (assuming
standard conditions are met) they are also not subject to
either Social Security or Medicare tax. Is this correct?

--
Vic Roberts

<< -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << ------------------------------------------------->

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