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Tax Deduction Consulting: 401(k) Deductions Brigham City UT

The 401(k) plan is named after a section in the IRS codes. It is a type of retirement plan that is established for employees. It allows them to save a certain portion of their income in a plan that is designed to produce earnings while at the same time deferring a portion of the current tax obligation. The word deferring is used because the tax on the earnings will be paid eventually.

Mr. Gregory W. Williams (RFC®), CFP, CHFC, CLU, LUTCF, MSFS
(801) 453-2271
6340 South 3000 East, Suite 500
Salt Lake City, UT
Company
Exit Strategy Specialists, LLC
Qualifications
Years of Experience: 26
Membership
IARFC, MDRT, FPA
Services
Invoice, Estate Planning, Business Planning, Portfolio Management, Trustee Service, Pension Planning, Executive Compensation Planning, personal Coach, Retirement Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, Mortgage Loans, Annuities, Life Insurance, Disability Income Insurance, Long Term Care Insurance, Medical Insurance, Group Insurance, Business Coach, Charitable Planning, Education Plan, Asset Protection, BuySell, Compensation Plans

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H&R Block
(801) 356-1356
990 S UNIVERSITY Ave
PROVO, UT

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H&R Block
(801) 334-4002
5845 E AVE BLDG 412
HILL AFB, UT

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H&R Block
(801) 546-3091
27 S FORT LN
LAYTON, UT

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H&R Block
(801) 225-4018
738 S STATE
OREM, UT

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Mr. A. Wayne Margetts (RFC®), LUTCF
(801) 532-1871
175 S Main St, Ste 1050
Salt Lake City, UT
Company
LPL
Qualifications
Education: BSc (Math)MBA
Years of Experience: 16
Membership
IARFC, MDRT, NAIFA
Services
Invoice, Estate Planning, Business Planning, Portfolio Management, Pension Planning, Executive Compensation Planning, Retirement Planning, Medicaid Planning, Tax Planning, Seminars Work, Employee Benefits, Stocks and Bonds, Mutual Funds, CD Banking, Annuities, Life Insurance, Long Term Care Insurance, Group Insurance, Charitable Planning, Education Plan, Charitable Foundations, Asset Protection, BuySell, Compensation Plans

Data Provided by:
H&R Block
(801) 733-0847
3438 BENGAL BLVD
SALT LAKE CITY, UT

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Synergy Accounting Solutions
(801) 542-0230
8282 S. State St. Suite
Midvale, UT
 
H&R Block Inside Sears Downtown
(801) 532-0610
754 S STATE ST
SALT LAKE CITY, UT

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Singleton's Tax Svc
(801) 373-6920
244 W 300 S Ste 1
Provo, UT

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Tax Deduction Consulting: 401(k) Deductions

401(K) IRS Deductions

The 401(K) Retirement plan is a method established by the IRS that allows an employee to save for retirement while at the same time deferring his tax obligation to a later date. Where is this deduction taken on your tax forms?

The 401(k) plan is named after a section in the IRS codes. It is a type of retirement plan that is established for employees. It allows them to save a certain portion of their income in a plan that is designed to produce earnings while at the same time deferring a portion of the current tax obligation. The word deferring is used because the tax on the earnings will be paid eventually. The idea behind the 401(K) is that after retirement age, earning will be reduced and deductions higher and this would be a better time to assume the tax obligation than at the current time.

The amount of income that can be deposited to the 401(k) plan in any given year is limited. The limit for the 2007 tax year is $15,500. This might be subject to an additional limit imposed by the company that administers the plan. Most tax experts advise you to max out your contributions whenever possible. This indicates the value of the 401(K) plan in the eyes of most tax experts.

The reason for this is that the amount of the contribution is not taken as a deduction on your tax forms. It does not even appear on your form W-2 as taxable income. For example, if you earn $50,000 in actual earnings for the year, and commit the maximum allowable amount to your 401(k), your W-2 will indicate only $34,500 of taxable earnings. This will result in a substantial reduction in tax obligation even before any other deductions or credits are applied.

The $15,500 will be invested in various ways while in your 401(k) and will produce earnings. These earnings will not be subject to tax either until they are withdrawn after retirement. The 401(k) plan has only a few drawbacks and they mostly involve withdrawing of the funds before retirement age. It is possib...

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