Are 401(k) contributions tax-deductible?

In Virginia, 401(k) contributions are tax-deductible, meaning they can be used to reduce the amount of taxable income. Contributions to a 401(k) are made with pre-tax dollars, meaning you do not have to pay taxes on contributions until you withdraw the money later down the line. When money is withdrawn from a 401(k), it is taxed as ordinary income and subject to any applicable taxes. This means that if you are in the highest tax bracket, you will have to pay the highest taxes on the withdrawal. The amount of money that you can contribute to a 401(k) is limited by the Internal Revenue Service. Currently, the maximum amount of contributions allowed in a 401(k) is $19,500 per year. There are also additional restrictions, such as age limits and limits based on whether or not you are an active participant in the plan. 401(k) contributions are a great way to save for retirement and reduce your taxable income. However, it is important to understand the rules and regulations associated with 401(k) contributions and to consult a tax professional if you have further questions.

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Are 401(k) contributions tax-deductible?

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