Microsoft Level 67+ - Reduce Your Tax Bill Using Microsoft DCP

The Microsoft Deferred Compensation Plan (DCP) is available to Microsoft employees Level 67+ and can potentially help you reduce your tax bill by thousands.
DCP is similar to your Microsoft 401(k), in that it allows you to defer a portion of your salary and bonus to reduce taxable income.
Video highlights:
00:07 What is DCP?
00:26 When can you enroll in DCP?
00:45 When can you receive the money you defer?
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SCHEDULE a 30-minute video call to discuss MICROSOFT DCP:
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We will talk through:
Strategies for reducing your taxable income
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Developing a comprehensive payout strategy
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Learn more about Microsoft DCP
There are only 2 times a year that you can enroll in DCP.
May 1-31: Elect to defer up to 100% of next year’s September cash bonus
November 1-30: Elect to defer up to 75% of next year’s salary
When can you receive the money you defer to the Deferred Comp Plan?
For every deferral you elect (each year that you defer salary and/or bonus), you must decide when you want the money to be distributed. You can either choose a lump sum distribution and receive it all at once or choose to receive it in annual installments, ranging from 3 to 15-years.
The payouts you elect will be taxed as ordinary income when money is distributed from your Deferred Comp Plan. You need to consider your future sources of income (RMD’s, Social Security, etc.) when deciding how and when to receive your deferred income. If you don’t properly plan - you could end up with an unexpected tax bill in retirement and significantly reduce your total tax savings.
Although the plan allows unlimited re-deferrals, it’s important to note that the start date of previously elected payouts must be pushed back at least 5 years. You cannot make payouts begin any earlier than originally elected.
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Avier Wealth Advisors
425-467-1011
10655 NE 4th Street, Suite 500
Bellevue, WA 98004
[e-mail]
Website: avieradvisors....
We focus on providing comprehensive financial planning and investment advisory strategies for tech professionals and their families.
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Third Party: Avier Wealth Advisors is not affiliated with Microsoft. There is no guarantee that the information we have provided is accurate. Microsoft employees are encouraged to contact their employer should they have any questions regarding their employee benefits.
Taxes: Avier Wealth Advisors does not prepare taxes. The tax ideas presented are meant to demonstrate general concepts rather than precise calculations. We consult with your tax professional for exact calculations.
#MicrosoftDCP #MicrosoftDeferredCompensation #MicrosoftEmployeeBenefits #MicrosoftEmployeeCompensation #MicrosoftEmployeePay #MicrosoftRSU #MicrosoftStock
00:00 Intro to Microsoft DCP
00:12 How does DCP help reduce your tax bill?
00:26 When can you enroll in Microsoft DCP?
00:45 How do you set your DCP payouts?
01:18 Can you change your elected DCP payouts?