Which statement describes the effect of taxes on a traditional 401(k) retirement account?

Business

1 answer:

worty [1.4K]3 years ago

3 0

Answer:

A traditional 401(k) is tax deferred because the income earned isn't taxed until the money is withdrawn.

Explanation:

A 401 k is a qualified tax-advantaged saving retirement plan. Usually, 401K plans are employer-sponsored. Employee contributions to the 401 k plans are deducted from the payroll before taxes are calculated. It means the employee contribution is not taxed at the time it's withheld by the employer.

The amounts saved are invested in market securities such as shares and bonds. The tax due from earning from the investment is deferred to the time of withdrawal. The employee is not required to pay taxes on contributions and investments earning every financial year.

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Answer:

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gogolik [260]

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Learn more about Customer orientation here: brainly.com/question/24553900

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