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ROFranklin
Level 1

Retirement Accounts

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.

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VolvoGirl
Level 15

Retirement Accounts

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.

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VolvoGirl
Level 15

Retirement Accounts

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.

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Critter
Level 15

Retirement Accounts

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.   

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