I thought I would add an additional comment here. As I interpret this, your earnings would be directed to your 401k, thereby deferring your "income" tax. But you are not deferring your social security and medicare taxes. You are still paying into the SS fund with these 401k wages. So, you could potentially be increasing your SS income with these contributions. I know that wasn't your original question, but I think it is good to know this.
Good luck,
Kelly C, CPA
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