Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 0
i know there is a big tax advantage to maxing out your 401k, but does this mean that if i had the same income/expenses as last year that i should be getting a bigger refund? i thought maybe i could invest the refund that i receive because of putting money in the 401k .
<<<<<<<<,

Briefly, depending on what your income tax bracket is (I assume you make around $40 if the $149 every two weeks is 10% of your income - without knowing anything else your marginal rate as an individual is in the 28% bracket plus you'll get a deducation for state income tax as well, if there is any in your state) that $149 pre-tax may net out to the same as the $110 after tax. If you want your take home pay to stay the same you may have to adjust your w-4 withholding to reflect to the lower income. Otherwise, yes, you'll get a bigger refund when you file your taxes
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.