CDH Taxman wrote:

- quote -

Think Roth IRA!

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I have a client who works for a company with w-2 wages and
he belongs to the 401(k) plan they offer. We have been
trying to reduce his taxable wages and he agreed to
contribute the max to his 401(k) plan. The employer has now
come to him and told him he is a "highly compensated
employee" (this is due to low enrollment from employees who
are not compensated as well, a.k.a. "top-heavy plan"). This
means he cannot contribute over a certain amount, or it will
disqualify the company plan. Accordingly, he has had to
reduce his contributions. To say the least, he is a little
miffed because this will leave approximately $6,000 on the
table as taxable income that he cannot defer. He is paid
too much to contribute to an IRA since the threshold is
around $70K for a single filer.

Do you guys have any suggestions for income deferal plans
that might be beneficial to him. We really need to defer
current income tax, he's not interested in deferring
earnings only (i.e. annuity).

Thanks.

--
Chris Henson
President
Providence Financial Services, Inc.
chenson[at]providencefinancial.net
479/736-4PFS (4737)

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >