Federally recognized tribes are sovereign legal entities, similar to state governments, with all the rights and attributes of a sovereign entity such as a state. They have a constitutionally guaranteed status as sovereign entities. An Indian tribe, as an income producing entity, is not subject to income taxation. However, income earned, if not otherwise exempt from income taxation, must included in the gross income of the Indian tribal member when distributed or constructively received by the tribal member.
How you treat a traditional IRA that you have inherited depends on whether you inherited the retirement plan from a spouse or from someone other than a spouse.
A section 401(k) plan is a type of deferred compensation plan that permits an employee to have his employer set aside a portion of his or her wages in the plan on a pre-tax basis. Upon making an election to participate in a 401(k) plan, the contributed wages are not subject to income tax withholding at the time of the deferral. Thus, they are not taxable wages at that time. However, they are subject to Social Security, Medicare, and federal unemployment taxes.
Generally, officers of a corporation are employees for employment tax purposes, and their compensation is wages. Thus, their wages are subject to Social Security, Medicare, and federal unemployment taxes along with withholding for federal income tax purposes. Only a corporate officer who does not perform any services or who performs only minor services and who neither receives nor is entitled to receive, either directly or indirectly, any compensation is not considered an employee.
There are three basic types of 401(k) retirement plans that an employer may choose from: a traditional 401(k) plan, a safe harbor 401(k) plan, or a SIMPLE 401(k) plan.
