Retirement
from24/7 Wall St.
3 days agoSolo 401(k) Contributions Can Save You $30,000+ in Taxes This Year
A $72,000 Solo 401(k) contribution can yield $30,000-plus tax savings only for high marginal tax profiles, not most self-employed earners.
A 401-K plan is a company-sponsored retirement account. Employees contribute their designated percentage of their income to be allocated. Employers often may offer to match at least a portion of these contributions. Contributions are made with pre-tax funds. There are two types of 401-K account categories: traditional and Roth-which differ primarily in how they're taxed. Assuming one is over age 59 ½, traditional 401-K withdrawals are taxed as income at the participant's income bracket at the time of withdrawal,