{"id":15418,"date":"2017-02-04T07:00:13","date_gmt":"2017-02-04T13:00:13","guid":{"rendered":"https:\/\/resource-center.hrblock.com\/?p=15418"},"modified":"2022-02-02T16:36:12","modified_gmt":"2022-02-02T22:36:12","slug":"mystery-of-deferred-compensation","status":"publish","type":"post","link":"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/income\/wages\/mystery-of-deferred-compensation\/","title":{"rendered":"Deferred Compensation Isn’t Just for Pro Athletes and CEOs…"},"content":{"rendered":"

Editor’s Note:<\/strong> Deferred\u00a0compensation is a common practice with pro athletes and CEOs. Well, almost all of them. Let’s dig into the the mystery of deferred compensation plans…<\/em><\/p>\n

Many of us have deferred compensation plans. You know them as pension plans, 401Ks, and IRAs<\/a>. These plans allow you to save money for retirement and save taxes on your current return.\u00a0 But, many celebrities, pro athletes, CEOs and corporate executives have supercharged deferred compensation plans \u2013 and they can allow these high earners to defer millions of dollars from taxation.<\/p>\n

An employee, side-hustler<\/a>, or\u00a0self-employed<\/a> person \u2013 like you and I \u2013 can participate a\u00a0pension plan, if offered, and defer up to $19,000 a year in income (taxes on the income too).\u00a0 If you\u00a0do not have access to a\u00a0pension plan, you can set up an IRA and defer up to $5,500 a year. Self-employed people can set up their own retirement plans and defer up to $55,000 a year (yes, one of the benefits of being self-employed).<\/p>\n

However, high earners can get a benefit that you and I don\u2019t get- the non-qualified deferred compensation plan or \u201cNQDC.\u201d Here the amount of income to be deferred is much more.<\/p>\n

So if you are watching the Super Bowl this weekend \u2013 know that the star player Tom Brady can participate in his pension plan and defer $18,000 a year. His wife Gisele can also participate in her pension plan, but he can structure his contract to get more income differed to the future\u2026.<\/p>\n","protected":false},"excerpt":{"rendered":"

Editor’s Note: Deferred\u00a0compensation is a common practice with pro athletes and CEOs. Well, almost all of them. Let’s dig into the the mystery of deferred compensation plans… Many of us have deferred compensation plans. You know them as pension plans, 401Ks, and IRAs. These plans allow you to save money for retirement and save taxes […]<\/p>\n","protected":false},"author":5,"featured_media":26748,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[24,46],"tags":[],"class_list":["post-15418","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income","category-wages"],"acf":[],"yoast_head":"The Mystery of Deferred Compensation | H&R Block<\/title>\n<meta name=\"description\" content=\"Join H&R Block as we dig into the the mystery of deferred compensation plans for everyday people and the ultra-wealthy.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/hrbcomlnp.hrblock.com\/tax-center\/income\/wages\/mystery-of-deferred-compensation\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" 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