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Before-Tax Contributions
(redirected from Before Tax Contribution)

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Before-tax contributions
The portion of an employee's salary contributed to a retirement plan before federal income taxes are deducted; this reduces the individual's gross income for federal tax purposes.

Before-Tax Contributions
Contributions made to a retirement plan with taxable withdrawals. That is, when one makes before-tax contributions to a retirement plan, one does not pay taxes on the contributions in the year they are made, but defers taxation until one begins to make withdrawals from the plan. One makes before-tax contributions to traditional IRAs and most 401(k)s. See also: After-tax contributions.


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Conversely, before tax contributions are those funds that you put into an account that have not been subject to taxes.
Most typically, the maximum before tax contribution rates will increase from 15 percent to 50 percent.
 
 
 
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