topic Retirement Accounts in Deductions & credits

Retirement Accounts

ROFranklin — Mon, 18 Nov 2019 21:00:24 GMT

Can you deduct a one-time payment to a tax-deferred employee sponsored retirement account? This payment was made to buy a year early retirement.

Re: Retirement Accounts

VolvoGirl — Mon, 18 Nov 2019 21:08:35 GMT

No. But if the funds didn't come from a tax deferred IRA or other 401K account the plan will keep track of it so when you eventually take it out it will be pro-rated and a portion will come out not taxable. My husband bought more time at his work so some of it it comes out not taxed now.

Re: Retirement Accounts

Critter — Mon, 18 Nov 2019 21:18:40 GMT

If you bought into a 401K outside of the payroll system then you will have a basis in the account for when you take out distributions ... the plan administrator will track this amount for you. You do NOT get to deduct it off your tax return.