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The Irony Of Taxing 401k Plans To Save Social Security

Fiduciary News spoke to Of Counsel Michelle Capezza in an article exploring the irony of taxing 401k plans to save social security in light of a recent report published by retirement researchers. 

Michelle commented, “While employee pre-tax elective deferrals are not current income for federal tax purposes, they are considered wages subject to Social Security (FICA), Medicare and federal unemployment taxes (FUTA). Thus, these employee 401k contributions, for example, are already subject to FICA taxes which fund Social Security. Workers need a viable way to save money for their non-working years and shouldn’t be penalized for doing so by further curtailing their efforts.”


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