Save time with our cheat sheets, fact sheets, checklists & books!

February 19, 2009


Your Guide



Income used for purposes of determining amount of contributions made to an employer sponsored plan or IRA.

For common-law employees, compensation is usually salary, wages bonuses and tips.

For purposes of making an IRA contribution, compensation includes wages, salaries, tips, professional fees, bonuses, and other amounts received for providing personal services are compensation.

For unincorporated business owners, compensation is usually net-earnings from self-employment.

Referring Cite

IRC §415(c)(3)(D)(2), IRC §3401(a), Form W-2, Governing Plan document, Publication 590

Additional Helpful Information

  • Compensation may be defined differently for certain purposes, such as non-discrimination testing.
  • Qualified plan documents should be consulted to determine the various definitions of compensation, and when they apply

Keep Learning

Domestic abuse distribution

A domestic abuse distribution is one that is made to domestic abuse victim, during the 1-year period beginning on any date on which the individual

Eligible retirement plan

The term “eligible retirement plan”, means a retirement plan to which a rollover contribution can be made. These are: (i)an individual retirement account described in

Qualified See-Through Trust beneficiary

Definition A qualified trust beneficiary is a trust that satisfies the requirements so as to be treated as a designated beneficiary.   For retirement accounts inherited

Saver’s Credit

Definition Also known as the Saver’s Tax Credit: Nonrefundable tax credit available to eligible individuals who make contributions to their retirement account. The saver’s credit

Be among the first to know when

IRA Rules