Is Contributing To Your 401K Tax Deductable?

Question

With the money you contribute to your 401K within a year, can you get a tax credit when you file your taxes?

Answer 1

yes and no...

yes, contributing to your 401k gives you a tax break. this is because 401k contributions are not taxed until you withdraw the money after you retire. so you won't have to pay tax on the income that goes in to your 401k for years.

no, you dont get a tax credit for 401k contributions. your 401k contributions will lower your tax burden because it doesnt appear as income.

Answer 2

Not exactly. What happens when you contribute to your 401k is that the money you contribute is not counted as taxable income, thus you do not have to pay taxes on the amount you contributed.

It's actually called tax deferred in that the income tax is deferred until you withdraw the money from your 401k.

Answer 3

contributions should NOT have been included in your taxable income by your companies payroll system.

Examine your paycheck. You should see the amount deducted before your net amount of the check. It should also show the year to date amount that has been taken out.

This amount cannot be deducted because it was "pretax" which means it was never taxed to begin with.

Answer 4

.NO! You get a tax brake on your return on investment when you retire.You get a tax brake up front ( What they take out of your pay check for401k is not reported as income ).Unless it is a ROTH IRA then it is taxed up front

Answer 5

yes it will help you one 100%