[GNC] Tax deferred account transfers suggestion

Michael or Penny Novack stepbystepfarm at comcast.net
Fri Apr 2 16:02:49 EDT 2021


On 4/2/2021 2:44 PM, David G. Pickett via gnucash-user wrote:
> It'd be nice if the transfers from tax deferred accounts (401k, IRA) to not tax deferred showed as taxable income on the tax report.  Reverse transfers might also be listed as tax deductions.

It would help you to understand the issues if you tried to record this 
transaction without gnucash (do it the old fashioned way, on paper).

This is not the only "interesting" situation involving taxable income. 
In this case, money WAS being transferred, debit some bank account, 
credit the 401k account. But take an example where you received NOTHING 
tangible but were informed you had some taxable income. You need an example?

As an employee benefit, an employer is allowed to pay the premiums on a 
life insurance policy on the employee's life, the employee getting to 
choose the beneficiary. Generally the employer makes this benefit "one 
year's salary" of life insurance. By US tax code, this is not considered 
taxable income to the employee up to $50,000 of insurance coverage. But 
suppose that employee made $60,000 per year so the insurance coverage 
was for that amount. The premium on $10,000 of that (the amount over 
$50,000) would taxable income to the employee.

<< this is really the same problem -- the issue is, what is the debit 
side of that credit >>


Michael D Novack





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