Pretax contribution

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.

Pre-Tax Contribution

A contribution made to a retirement plan with taxable withdrawals. That is, when one makes pre-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 pre-tax contributions to traditional IRAs and most 401(k)s. See also: After-Tax Contributions.

Pretax contribution.

A pretax contribution is money that you agree to have subtracted from your salary and put into a retirement savings plan or other employer sponsored benefit plan.

Your taxable earnings are reduced by the amount of your contribution, which reduces the income tax you owe in the year you make the contribution.

Some pretax contributions, including those you put into your 401(k), 403(b), or 457, are taxed when you withdraw the amount from your plan. Other contributions, such as money you put into a flexible spending plan, are never taxed.

References in periodicals archive ?
Source of funds - employee pretax contribution (no employer funds), b.
3 million pretax contribution of the extra week in the fiscal 2012 quarter and the prior-year $952.
3% at the end of June, made a pretax contribution of EUR142m in April-June 2011, up by 34% on the year.
The maximum pretax contribution dollar amount is set by law and adjusted for inflation annually.
Over time, the impact of this additional rate of return--coupled with the pretax contribution allowance--can be substantial.
Fortunately, Weber's employer allows for ``catch-up contributions,'' a pretax contribution that exceeds the limit on 401(k) plans.
401(k) contributions: Because of the limited participation of rank-and-file employees in the 401(k) plan, the executives are limited to an annual pretax contribution of $4,500 to the plan (the 2012 IRS limit on employee pretax contributions under Sec.
9 billion, while the unit's pretax contribution to earnings, net of allocated interest expense, increased 20.
For both the ADP and ACP safe harbor formulas, the 1998 IRS guidance required that 1) participants must be notified in writing of the contributions at least 30 days, and not more than 90 days, prior to the beginning of the plan year (but there was a transitional rule for the 1999 plan year), 2) participants must be provided with a reasonable period to make or change a pretax contribution election, 3) participants must be provided with flexibility in setting their pretax contribution rates to obtain the maximum match or less than the maximum match, 4) the plan's procedures for changing the rate of pretax contributions had to be explained in the notice, and 5) the plan sponsor could not discontinue the safe harbor contributions during the year.
This year the government allows a maximum pretax contribution of $9,500 to 401(k) plans.
The pretax contribution from the Government Contracts segment will be approximately $90 million to $100 million in 2012, down from approximately $180 million in 2011.
3% to $665 million, while the pretax contribution vaulted 27.