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Lev
Lev, Tax Advisor
Category: Tax
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A taxpayer defers salary under a 403(b) plan. The deferral

Resolved Question:

A taxpayer defers salary under a 403(b) plan. The deferral reduced his Federal taxable wages. The taxpayer is now over 59.5 & wants to begin taking distributions from the plan. Would the amount the taxpayer deferred & contributed into the plan be taxable?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

LEV :

Hi and welcome back!

Expert:  Lev replied 5 years ago.

Hi and welcome to Just Answer!

The deferral compensation is part of the compensation which the taxpayer defers from tax liability by contributing that amount into tax deferral account - as 403b plan in your situation. The tax liability is deferred until the taxpayer eventually takes distributions from that account.

 

Would the amount the taxpayer deferred & contributed into the plan be taxable? - No.

But when distributed - the distributed amount will be taxable.

Let me know if you need any help.

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