How does a typical vesting timeline work with respect to employer contributions?
There are two dates that matter for vesting in this situation: If you left the company on 12/31/16, you would be entitled to none of the company contributions. If you left on 1/1/17, you would be entitled to all $20k. This is sometimes known as a cliff vesting schedule. Some companies do a stair step - 20% after year 1, 40% after year 2, etc. This is known as graded vesting. But, that is not the case based on the language here.
There is Free employer money on both sides of the tax fence for some employees.   On the pretax side, your employer may provide you a match.  If so, invest the maximum to get 100% of the match.   On the after tax side, many companies offers a 15% discount on ESPP plans and a one year hold.  My wife has such an employer.  The one year hold is fine because it allows us to be taxed at Long Term Capital gains if the stock goes up which is lower than our current income bracket.  After creating a seasoned pool of stocks that we could sell after the one year hold, we are then able to sell the same number of stocks purchased each month.  This provides a 17.6% guaranteed gain on a monthly basis.  How much would you purchase if you had a guaranteed 17.6% return.  Our answer is 15% (our maximum allowed). The other trick is that while the employer is collecting the money, you will purchase the stock at the lowest day of the period.  You will usually sell for even more than the purchase price unless the day purchased was the lowest day of month.   The trick is to reinvest the money in tax free investments to balance out the pretax investing.  Never leave the money in the plan.  That is too much risk. Vesting As you may know a stock option is the right to acquire a given amount of stock at a given price.  Actually acquiring the stock is referred to as exercising the option.  Your company is offering you options over 200,000 shares but not all of those options can be exercised immediately. Initially you will only be able to acquire 25,000 shares; the other 175,000 have conditions attached, the condition in this case presumably being that you are still employed by the company at the specified time in the future.  When the conditions attached to a stock option are satisfied that option is said to have vested - this simply means that the holder of the option can now exercise that option at any time they choose and thereby acquire the relevant shares. Dividends Arguably the primary purpose of most private companies is to make money for their owners (i.e. the shareholders) by selling goods and/or services at a profit.  How does that money actually get to the shareholders?  There are a few possible ways of which paying a dividend is one.  Periodically (potentially annually but possibly more or less frequently or irregularly) the management of a company may look at how it is doing and decide that it can afford to pay so many cents per share as a dividend.  Every shareholder would then receive that number of cents multiplied by the number of shares held. So for example in 4 years or so, after all your stock options have vested and assuming you have exercised them you will own 200,000 shares in your company.  If the board declares a dividend of 10 cents per share you would receive $20,000.  Depending on where you are and your exact circumstances you may or may not have to pay tax on this. Those are the basic concepts - as you might expect there are all kinds of variations and complications that can occur, but that's hopefully enough to get you started. No, you're not missing anything. RSUs are pretty simple when it comes to taxes. They are taxed as compensation at fair market value when they vest, basically equivalent to the company giving you a cash bonus and then using it to buy company stock. The fair market value at vesting then becomes your cost basis. Assuming the value has increased since vesting, selling the shares that vested at least a year ago (to qualify for lower long-term capital gains tax rates) with the highest cost basis with result in the minimum taxes. "Pretty simple actually. This is a state-run defined benefit plan, where the benefit is calculated based on the length of the employment and the contributed amounts. This is what in the US is known as the Social Security.  This is a defined contribution plan, where the employee can chose the level of risk based on certain pre-defined investment guidelines (more conservative or more aggressive). In Poland, it appears that there's a certain amount of the state-mandated SS tax is transferred to these plans. Nothing in the US is like that, but you can see it as a mandatory IRA with a preset limited choice of mutual funds to invest into, as an analogy. The recent change was to reduce the portion of the madatory contribution that is diverted to this plan from 7+% to 2.3% (on account of expanding the contribution to (1)). Probably the recent crashes of the stock markets that affected these accounts lead to this decision. This is voluntary defined contribution plan, similar to the US 401Ks. This division is actually pretty common, not unique to Poland. I'd say its the ""standard"" pension scheme, as opposed to what we're used to in the US." There's no such requirement in general. If your particular employer requires that - you should address the question to the HR/payroll department. From my experience, matches are generally not conditioned on when you contribute, only how much. Sorry, it appears not, according to http://www.nysscpa.org/cpajournal/2008/508/perspectives/p12.htm: ...and the election to make Roth 401(k) contributions (these are after-tax contributions) is irrevocable.  Fairmark says the same thing. PS, don't complain too loudly, given the reason for the problem. :) Let me first start off by saying that you need to be careful with an S-Corp and defined contribution plans.  You might want to consider an LLC or some other entity form, depending on your state and other factors. You should read this entire page on the irs site:  S-Corp Retirement Plan FAQ, but here is a small clip: Contributions to a Self-Employed Plan You can’t make contributions to a self-employed retirement plan from your S corporation   distributions. Although, as an S corporation shareholder, you receive   distributions similar to distributions that a partner receives from a   partnership, your shareholder distributions aren’t earned income for   retirement plan purposes (see IRC section 1402(a)(2)). Therefore, you   also can’t establish a self-employed retirement plan for yourself   solely based on being an S corporation shareholder. There are also some issues and cases about reasonable compensation in S-Corp.  I recommend you read the IRS site's S Corporation Compensation and Medical Insurance Issues page answers as I see them, but I recommend hiring CPA You should be able to do option B.  The limitations are in place for the two different types of contributions:  Elective deferrals and Employer nonelective contributions.  I am going to make a leap and say your talking about a SEP here, therefore you can't setup one were the employee could contribute (post 1997). If your doing self employee 401k, be careful to not make the contributions yourself. If your wife is employed the by company, here calculation is separate and the company could make a separate contribution for her. The limitation for SEP in 2015 are 25% of employee's compensation or $53,000.  Since you will be self employed, you need to calculate your net earnings from self-employment which takes into account the eductible part of your self employment tax and contributions business makes to SEP.  Good read on SEPs at IRS site. and take a look at chapter 2 of Publication 560. I hope that helps and I recommend hiring a CPA in your area to help. Just for op's reference. A deferred wage entry would be something along the lines of the following scenario: you contract with a worker to perform some work at some point in the future, you would then book deferred wages for the amount to liabilities and deferred labor for that amount to assets, which would increase both and leave equity unchanged. Is the Grant Date or the Vest Date used when determining the 12-month cutoff for long-term and short-term capital gains? You don't actually acquire the stock until it's vested, so that is the date and price used to determine your cost basis and short-term/long-term gain/loss.  The grant date really has no tax bearing. If you held the stock (time between vesting and sale) for more than one year you will owe long-term CG tax, if less than one year you will owe short-term CG tax. 401k contributions are exempt from employee and employer FICA withholding.  The employer withholding is approximately 7% of the gross.  The closer the employer match ratio is to 7%, the closer it is to paying for itself.  Example: Assuming an employee is match-maximizing and in very round numbers grosses 100,000 per year.  A 50% match schedule is about $350 cheaper per employee than a 100% match schedule: Default non participant: The employee will see about 7000 deducted for FICA, and the employer will pay 7000 to FICA if they don't participate.   First case: the match is 100%, 1-for-1 to a 5% cap, the employee will deduct 5000, and have 6650 withheld for FICA.  The employer will pay 6650 to FICA.  The total employer cost of withholding and match is 11,650.   Second case: If the match is 50%, 1-for-2 to a 5% cap, the employee will deduct 10000, and have 6300 withheld for FICA.  The employer will pay 6300 to FICA.  The total employer cost of withholding and match is 11,300. "It's not possible for them to be comingled. From the IRS FAQ: Does my employer need to establish a new account under its 401(k),   403(b) or governmental 457(b) plan to receive my designated Roth   contributions? Yes, your employer must establish a new separate account for each   participant making designated Roth contributions and must keep the   designated Roth contributions completely separate from your previous   and current traditional, pre-tax elective contributions. It doesn't have to be a separate ""account"" necessarily, but the amounts must be tracked separately as if they were in separate accounts: Does separate account refer to the actual funding vehicle or does it   refer to separate accounting within the plan's trust? Under IRC Section 402A, the separate account requirement can be   satisfied by any means by which an employer can separately and   accurately track a participant’s designated Roth contributions, along   with corresponding gains and losses." The deadline for contributing to a 401K is the last paycheck paid in December. That may not be the last pay period that ends in December. For example if the last pay period ends on Friday the 30th and you get paid on Thursday January 5th, that check is the first in the new year.  The US government has rules regarding how quickly the money needs to be sent to the 401K trustee. It is possible that the money may get there after the first of the year, but the important date for you is the date of the last paycheck in December. The company form to set the contribution rate (it could also be on a website) will have a deadline to determine if the rate makes the next check or the one after that. The form will also have a maximum amount as a percentage of the check. Some could allow up to 100% but yours might not. So how much you can put in with the last paycheck or two is up to company policy and your pay rate. The company forms or website will describe how the company match works. If you were try and put as much as possible into a few checks, it is possible to hit the $18,000 yearly limit in just a small part of the year. In some companies that would mean that you could miss out on company match money, because that would never be more than x% of each check. For example if you were to put $3,000 per check with a base pay of $5,000 every two weeks and if the maximum company match was 5%. After 6 checks you would be done: you would have put in $18,000 and the company would have put in $250 x 6 or $1,500. If you were to spread the money over all 26 checks you would still put in $18,000 but the company would have put in $6,500. "If your business is structured as a partnership or sole proprietorship you call this investment ""partner equity"".  If instead it is structured as a corporation, then the initial investment is called ""paid-in capital"".  Either way, this represents the capital the initial investors or partners provided to the company in exchange for their ownership stake. The most important thing in your case is that since that initial investment is in the form of inventory, you are going to have to document the value of that investment somehow.  You will definitely need a comprehensive manifest of what you contributed, including titles and condition, and if possible you should document the prices at which similar items are being offered for sale at the time you start operating.  Having this information will support your claims as to the fair market value of the start-up contribution, should the tax authorities decide to question it." You might want to bring this fancy new IRS rule to your employer's attention.  If your employer sets it up, an After-Tax 401(k) Plan allows employees to contribute after-tax money above the $18k/year limit into a special 401(k) that allows deferral of tax on all earnings until withdrawal in retirement. Now, if you think about it, that's not all that special on its own.  Since you've already paid tax on the contribution, you could imitate the above plan all by yourself by simply investing in things that generate no income until the day you sell them and then just waiting to sell them until retirement.  So basically you're locking up money until retirement and getting zero benefit. But here's the cool part:  the new IRS rule says you can roll over these contributions into a Roth 401(k) or Roth IRA with no extra taxes or penalties!  And a Roth plan is much better, because you don't have to pay tax ever on the earnings.  So you can contribute to this After-Tax plan and then immediately roll over into a Roth plan and start earning tax-free forever. Now, the article I linked above gets some important things slightly wrong.  It seems to suggest that your company is not allowed to create a brand new 401(k) bucket for these special After-Tax contributions.  And that means that you would have to mingle pre-tax and post-tax dollars in your existing Traditional 401(k), which would just completely destroy the usefulness of the rollover to Roth.  That would make this whole thing worthless. However, I know from personal experience that this is not true.  Your company can most definitely set up a separate After-Tax plan to receive all of these new contributions.  Then there's no mingling of pre-tax and post-tax dollars, and you can do the rollover to Roth with the click of a button, no taxes or penalties owed. Now, this new plan still sits under the overall umbrella of your company's total retirement plan offerings.  So the total amount of money that you can put into a Traditional 401(k), a Roth 401(k), and this new After-Tax 401(k) -- both your personal contributions and your company's match (if any) -- is still limited to $53k per year and still must satisfy all the non-discrimination rules for HCEs, etc. So it's not trivial to set up, and your company will almost certainly not be able to go all the way to $53k, but they could get a lot closer than they currently do. The simple answer is that with the defined contribution plan: 401k, 403b, 457 and the US government TSP; the employer doesn't hold on to the funds. When they take your money from your paycheck there is a period of a few days or at the most a few weeks before they must turn the money over to the trustee running the program. If they are matching your contributions they must do the same with those funds.  The risk is in that window of time between payday and deposit day. If the business folds, or enters bankruptcy protection, or decides to slash what they will contribute to the match in the future anything already sent to the trustee is out of their clutches. In the other hand a defined a benefit plan or pension plan: where you get X percent of your highest salary times the number of years you worked; is not protected from the company. These plans work by the company putting aide money each year based on a formula. The formula is complex because they know from history some employees never stick around long enough to get the pension.  The money in a pension is invested outside the company but it is not out of the control of the company. Generally with a well run company they invest wisely but safely because if the value goes up due to interest or a rising stock market, the next year their required contribution is smaller. The formula also expects that they will not go out of business. The problems occur when they don't have the money to afford to make the contribution. Even governments have looked for relief in this area by skipping a deposit or delaying a deposit.  There is some good news in this area because a pension program has to pay an annual insurance premium to The Pension Benefit Guaranty Corporation a quai-government agency of the federal government. If the business folds the PBGC steps in to protect the rights of the employees. They don't get all they were promised, but they do get a lot of it.  None of those pension issues relate to the 401K like program. Once the money is transferred to the trustee the company has no control over the funds.