pretax contribution
Money you put into an account before the government counts it as income, which lowers the amount of your paycheck that gets taxed right away.
A definition says what a thing is; it never says whether it fits you. The guides explain how it works and name the professional who confirms it for a particular person. The No Advice Disclosure.
Words beside it
- Catch up contribution
Extra you may put into retirement accounts once you reach 50.
- contribution
The money you actually put into an account like an IRA in a given year. The government sets a maximum dollar amount you are allowed to add each year.
- contribution limit
The maximum dollar amount the government allows you to put into a certain account in a given year.
- Contribution margin
Price minus variable cost per unit. What each sale contributes toward fixed costs and profit.
- direct contribution
A direct contribution is when you put money straight into an account without any extra steps in between. For example, putting money right into a Roth IRA without converting it from another account first.
- nondeductible contribution
A nondeductible contribution is money you put into a traditional IRA but cannot subtract from your taxable income that year. You still pay normal income tax on it upfront, which matters later when you convert it.
- pretax
Pretax money is money you put into an account before the government takes income tax out of it, meaning you get a tax break now but will owe taxes when you take the money out later.
Ask about pretax contribution
A model reads this page and answers from it. It will say when the answer is not on the page. Education, not personalized advice.