A portion of company profits allocated by an employer in, Ask an Expert

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A portion of company profits allocated by an employer, in good years, to an employee's trust.Contributions on behalf of every employee are expressed as a percentage of salary with 5% being common practice. If the profit-sharing plan is a qualified plan according to the IRS, employer contributions are tax deductible as a business expense. These contributions are not presently taxable to the employee; advantages are taxed at the time of distribution.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9533685

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