Contributing $1000 to your 401K will reduce your taxable income by $1000 AND increase your 401K balance by $1000.
Increasing your withholding by $1000 won't reduce your taxable income and won't add anything to your 401K. All it'll do is put $1000 more in the pot toward your 2016 tax bill.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
