Does DBP 401 A mandatory contribution reduce AGI?

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elderwise
Posts: 83
Joined: Fri Jul 22, 2016 10:27 am

Does DBP 401 A mandatory contribution reduce AGI?

Post by elderwise » Sun Sep 23, 2018 8:17 am

Folks,

I am maxing out my state 457 B and 401K no match unfortunately, however deffering 18.5 on both for a total of 37K.

My state agency also has. A defined pension plan and that takes about 11K off my salary annually.its pre tax of course so does this reduce my tax ?

Thanks,

Spirit Rider
Posts: 8718
Joined: Fri Mar 02, 2007 2:39 pm

Re: Does DBP 401 A mandatory contribution reduce AGI?

Post by Spirit Rider » Sun Sep 23, 2018 9:22 am

A 401a is actually a Defined Contribution Plan (DCP).

Mandatory employee contributions are "picked up" by the employer as pre-tax salary reductions. As such they are not reflected in your; W-2 Box 1, AGI, all the various MAGIs and your taxable income.

Also, the are not considered employee elective contributions and are not included in the 402g limit, 2018 = $18,500.

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