Before-tax contributions

(redirected from Pretax Contributions)

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.
References in periodicals archive ?
MC offers the following employee benefits: group health insurance coverage, group life insurance, group short-term and long-term disability benefits, and a company matching contribution on employee pretax contributions equal to 50% of the first 3% of compensation contributed to the company's 401(k) plan.
Communications concentrate on plan basics such as how the plan works, the advantages of pretax contributions, tax-deferred compounding, starting early, contributing regularly and how to invest plan contributions to reach retirement goals.
402A(c)(2), if, for example, an individual chooses to designate $12,000 as Roth contributions, he or she may designate the remaining $3,500 (or $8,500, if over age 50) as traditional pretax contributions.
The card provides electronic access to the pretax contributions set aside in the accounts, eliminating the paperwork associated with securing reinbursement for qualified expenses.
These "consumer-driven" plans--a term for shifting some of the responsibility for managing health costs to employees--have the potential to hold down costs, and some savings can be realized through plans that allow pretax contributions.
On the flip side, he advises employees not to make pretax contributions for disability benefits.
It had to be reduced dollar for dollar by any monies set aside through pretax contributions to a 401(k) plan, like the NTCA Savings Plan.
Anyone participating in these qualified defined-contribution retirement plans is making regular pretax contributions (of up to $10,500 annually for 2001, $11,000 for 2002).
Taxes are deferred, however, not eliminated: when the employee begins withdrawing funds from the plan, taxes must be paid on the pretax contributions, any employer matching contributions, and any earnings on these contributions.
The Hard Rock Hotel/Casino, in which the company has a 40 percent equity interest and receives a management fee of 4 to 6 percent of adjusted gross revenues, provided Harveys with a combined management fee and equity-based pretax contributions of $879,000 for the fourth quarter of 1995 compared to combined management fees and equity contribution of $418,000 for the third quarter of 1995.
Often called cafeteria plans, FBPs address only the pretax contributions employees are allowed to make rather than the full menu of benefit choices the more general term implies.