2006-10-18 11:17:46 · 7 answers · asked by angel_rat_83 1 in Business & Finance ➔ Personal Finance
NO. You should maximize your 401(k) contribution every year. You get to put away "pre-tax dollars" that earn interest instead of after tax dollars. If you would be in a 30% tax bracket, that means that you get to invest $100 instead of $70 right from the beginning. Obviously, the $100 will earn more interest than the smaller amount. Contributions made to a 401(k) account are taken away from Gross Earnings and reduce your social security taxes by reducing the amount that those taxes are calculated upon. This is an excellent investment for almost everyone.
2006-10-18 11:24:33 · answer #1 · answered by Anonymous · 0⤊ 1⤋
actual earnings from a defined earnings 401-k plan is taxable. You did not make a contribution to the pension and you have not been taxed on the advantages won. although earnings stated on a 1099R isn't concern to FICA, to social risk-free practices or medicare. Retirement earnings from 401k, IRA, pension are stated each year on a 1099R.
2016-11-23 18:25:30 · answer #2 · answered by ? 4 · 0⤊ 0⤋
You pay Social Security tax on your gross earnings. That is before the 401(k) amount is taken off. Then you pay the rest of the federal, state, and local taxes on the lower amount.
2006-10-18 13:24:51 · answer #3 · answered by troythom 4 · 0⤊ 0⤋
I believe everyone before me is wrong. You must pay SS taxes on the gross before 401k is deducted. 401k is not subject to income taxes. When you withdraw it at retirement, you don't pay SS taxes but you will pay income taxes on the withdrawal.
2006-10-18 11:39:12 · answer #4 · answered by highloyo 2 · 1⤊ 0⤋
Do you mean when you contribute or when it pays out? When you are contributing, no. I dont know about the payout time.
2006-10-18 11:22:18 · answer #5 · answered by Anonymous · 0⤊ 0⤋
No... thats the beauty.
2006-10-18 11:22:12 · answer #6 · answered by amanda 3 · 0⤊ 0⤋
no
2006-10-18 11:23:22 · answer #7 · answered by pdudenhefer 4 · 0⤊ 0⤋