I am humbled (frequently). Here's an easy one for you-all experts out there Clients get more DCB in box 10 that they spend. Excess goes on line 7 as taxable income. Now line 16 of 2441. How does the client "forfeit" an amount. How is that done, then what happens? My apologies for a question about (what I conside to be) a rather simple concept.
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Sec 121 plans usually have a "use it or lose it" feature. If the unused amount in the account was forfeited back to the employer at the end of the year it won't be taxable income to the employee. If it was paid to the employee as cash, not reimbursement for DC then it's income.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de Tocqueville -
Thanks DAVEO,
I'm assuming the client will remember forfeiting the surplus back to the employer (if they did). Is that an easy process, like just calling up payroll dept and saying "let's do it"?Comment
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Most don't, it's usually an "oh ****" moment. Most remember getting a check.In other words, a democratic government is the only one in which those who vote for a tax can escape the obligation to pay it.
Alexis de TocquevilleComment
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