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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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If you have both before-tax contributions (the most common type) and after-tax contributions (unusual, but possible) in your retirement account, you would pay tax only on the portion that represents your pretax contributions.
A New Way to Move Into a Roth 401(k) by Mary Beth Franklin, Senior Editor, / Kiplinger.com
For instance, for an equal before-tax contribution of $3,000, investors would end up with less after-tax money if they pay 40% before contributing (Roth) than if they wait and pay only 30% while withdrawing (traditional).
The Roth versus the Traditional IRA: an annual decision by Bechtel, Terry; Schaub, Mark / The National Public Accountant
Before-tax contribution activity varied among participants.
Latest EBRI/ICI Analysis: Average 401(k) Participant Contributes 6.8% ... by PR Newswire
 
 
 
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