Tax Benefits To Funding Employer Retirement Account 401K

[heydude]

Are there any tax benefits I am missing from putting money in to my employers 401k?

I see there is a savers credit but you must make less than like 27,000 to get it.

Anything else?

[sweetana3]

A 401(k) represents a way to reduce your taxable income since contributions come out of your pay before taxes are withheld; many plans include a matching contribution from your employer; and the money you save benefits from tax-deferred growth, which lets your money compound more quickly than it would if it were taxed yearly.



If your question is currrent year tax benefits, the fact it does not appear on your return as taxable income is the only benefit to this year's taxes.

[heydude]

ok, just making sure i got all my stuff done for my taxes! sweetana3, you have been so helpful to me! i should just be direct linking in with you! hehe.

[rosarugosa]

Yes, I'll echo the thanks to Sweetana for being our SLN subject matter expert on taxes!

[sweetana3]

Well, I retired from the IRS with 31 years service. I was originally in collection, then an auditor, then in support, then Taxpayer Advocate (formerly Problem Resolution) and finally customer service. I also learned what not to answer since the law changes way too fast and often.

When I started in up in Alaska, we did not even have computer support. We used microfilm. I also could complete a full return or audit report with pen and pencil and maybe a calculator.