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- Title
IRS Ruling Affects §401 (k)/(m) Deductions for Many Employers.
- Authors
Fernstrom, Stephen C.
- Abstract
The United States Internal Revenue Service (IRS) provides new guidance for determining the proper employer tax deduction for 401(k) and (m) plans in Revenue Ruling 90-105. The ruling will require adjustments in the tax deduction practices of many plans. It effectively prohibits a one-time acceleration of 401(k) plan deductions implemented by many 401(k) plan sponsors. Employers forced to change their accounting method as a result of the ruling will find themselves in the position of having underpaid their estimated tax during 1990. According to the IRS Announcement 90-144, underpayment for installments due before December 18, 1990, that are directly attributable to the ruling, will not be subject to penalties.
- Subjects
401(K) plans; EMPLOYEE benefit accounting; UNITED States. Internal Revenue Service; TAX deductions; BUSINESS enterprises; TAX penalties
- Publication
Benefits Quarterly, 1991, Vol 7, Issue 2, p78
- ISSN
8756-1263
- Publication type
Article