Contributions to a Traditional 401(k) plan are made on a pre-tax basis, resulting in a lower tax bill, and higher take-home pay. Contributions made to a Roth 401(k) are made on an after-tax basis, which means that taxes are paid on the amount contributed in the current year. The reverse is true once you are eligible to make 401(k) withdrawals. Withdrawals from Traditional 401(k) plans are taxable, while those made from a Roth 401(k) are not.
You still have time to save in these accounts
If you meant to set aside more money for retirement or health expenses last year, you still have time to contribute to these accounts.
Deductions you may not know about (but should be taking)
What we don’t know can hurt us come tax time. Learn how you can maximize your deductions and find other tax savings.