Does Contributing To 401K Reduce AGI?

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   David G. Pipes, CLU®, RICP®

   Business Development Officer, T.D. McNeil Insurance Services, Fresno, California

   In most plans a contribution to a 401 (k) would be made with before-tax dollars. The effect is to reduce the amount of income reported. There isn’t a subsequent reduction in AGI. It is possible, however, that your 401 (k) allows for after-tax contributions and a “Roth” option. In this situation the contributions would neither reduce the reported income nor be an adjustment on the AGI.

   Answered on January 12, 2015

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