Biden calls for 401(k) tax break overhaul. What it means for you
Biden calls for 401(k) tax break overhaul. What it means for you
For instance, let’s say you’re making $100,000, and you’re single, which means you’re in the 24% tax bracket. If you commit to putting away $10,000 a year – 10% of your pay -- into your 401(k), you’re reaping about $2,400 in tax savings.
WATCH NOW VIDEO05:41 Here’s what Biden’s tax plan could mean for investors In comparison, a single filer making $40,000 and saving 10% of his pay -- $4,000 – into a 401(k) would only reap about $480 in tax savings. That’s because he’s in the 12% tax bracket.
To equally incentivize savers regardless of what they earn, Biden proposes a credit of approximately 26% to replace the deduction savers get for putting money in a 401(k) plan, according to the Tax Policy Center’s analysis.
