Describe special treatment for highly-compensated employees

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JIM is considering implementing a 401K program for its employees. The program plan will include the company matching at 50% of the employee's contribution up to 6% contribution.

The Human Resources manager proposing this plan feels it will reduce turnover, improve morale, and provide a competitive edge when recruiting new employees.

The HR manager has estimated JIM's annual contribution to be $300,000 and the savings to be $70,000 in employee turnover costs and improved performance. Management is concerned about this additional cost.

Describe the 401 K limits and special treatment for highly-compensated employees. Document how, as a tax analyst, you see this program. Document what, if any, will be the tax implications of this program.

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This paper completed in 1800 words in which we have explained introduction, 401(K) and its limits, highly compensated employees, matches, ambitious, conclusion and references and we have explained also this essay sheds light on the importance of 401(k), which is the most widely used retirement savings plan in the United States, and its contribution limits and A 401(k) can be described in broad terms as a retirement savings plan. It is sponsored by the employer of the concerned worker.

Reference no: EM131564715

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