1. 47 POINTS
    Kevin Haney
    A.S.K. Benefit Solutions, New Jersey
    Pre tax payroll contributions used to fund your 401K reduce the amount of income reported on your W2. Your Adjusted Gross Income (AGI) is your gross income minus adjustments. Since pre tax elections reduce reported income, it also reduces AGI. Your AGI is used to determine the amount of qualified medical expenses you can deduct, and may apply to other tax trigger amounts.
    Answered on July 23, 2014
  2. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! I am pleased to hear you ask about your 401k, planning for your retirement is a good thing, and I wish more people were doing it. If your contributions are being made pre-tax, then yes, your Gross Income will be adjusted downward for the amount of those contributions. If they are made after-tax, then they obviously will not. I hope that helps, thanks for asking!
    Answered on July 23, 2014
  3. Did you find these answers helpful?
    Yes
    No
    Go!

Add Your Answer To This Question

You must be logged in to add your answer.


<< Previous Question
Questions Home
Next Question >>