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Level 1

Hello, Good morning. i have a question about retirement plans. i contribute to a 401(a ) plan. can i use that as a deduction? thank you

 
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Level 1

Hello, Good morning. i have a question about retirement plans. i contribute to a 401(a ) plan. can i use that as a deduction? thank you

Your contribution to a 401(a) plan is a permanent reduction of your salary, with the reduction amount being invested on your behalf by the employer into a money-purchase pension plan. There is nothing for you to deduct, since your salary has already been reduced. You will pay tax on withdrawals when you retire, since the money was not taxed during the time of your employment.

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Level 1

Hello, Good morning. i have a question about retirement plans. i contribute to a 401(a ) plan. can i use that as a deduction? thank you

Your contribution to a 401(a) plan is a permanent reduction of your salary, with the reduction amount being invested on your behalf by the employer into a money-purchase pension plan. There is nothing for you to deduct, since your salary has already been reduced. You will pay tax on withdrawals when you retire, since the money was not taxed during the time of your employment.