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What are the tax implications of contributing to the 401(k) Plan?

April 26, 2017contributing implications Plan tax

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What are the tax implications of contributing to the 401(k) Plan?

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Federal income taxes are deferred for all monies contributed to the 401(k) Plan, as well as the interest earned. State income taxes are also deferred with the exception of state income taxes for the State of Pennsylvania. Pennsylvania will deduct state income taxes prior to any deferrals to the 401(k) Plan. In addition, Medicare and Social Security taxes are not deferred. To find out how this will affect your personal finances you must contact your personal tax advisor.