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Hanging sentence: "...these contributions are made on an after-tax basis and all earnings."
Under the heading Taxation, I don't understand the statement "Earnings from investments in a 401(k) account in the form of capital gains are not subject to capital gains taxes."
That seems to be misleading. All profits in a 401k are subject to normal income taxes upon withdrawal, excepting possibly for a special provision called NUA for company stock inside a 401K.
I am thinking the original author is probably trying to say, compared to mutual funds which often have annual capital gains distributions with tax liability, 401K allows savings to accumulate tax-deferred until withdrawal.
So the first sentence should say: "Income taxes on pre-tax contributions and investment earnings in the form of interest and dividends add: and capital gains are tax deferred."
Upon withdrawal all 401K gains are taxed as normal income (short term gains tax treatment), excepting for a special provision called NUA which allows favorable tax treatment (lower long term gains tax rates) for certain company stock gains, subject to the NUA rules.
TBILLT (
talk) 16:22, 10 July 2018 (UTC)TBILLT
174.7.167.228 ( talk) 13:14, 15 August 2020 (UTC)
This can be readily seen by simple calculation. — Preceding unsigned comment added by 159.118.108.99 ( talk) 18:50, 3 November 2018 (UTC)
starts from the 400 billion dollar medical expenses, and the one man that started it. — Preceding unsigned comment added by 208.89.33.32 ( talk) 18:28, 6 October 2021 (UTC)
KiwiSaver isn't a tax deferred arrangement (it has no tax offset or effect on your net income). The statement in paragraph two of Other Countries implies that KiwiSaver is an equivalent scheme to a 401(k) (noting that the UK and Australia do have similar, albeit not identical, schemes). Happy to discuss, but I'm going to remove the NZ reference unless there is a specific point to it being a comparison (that NZ does not have an equivalent). Roche-Kerr ( talk) 00:45, 25 April 2024 (UTC)
This is the
talk page for discussing improvements to the
401(k) article. This is not a forum for general discussion of the article's subject. |
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Find sources: Google ( books · news · scholar · free images · WP refs) · FENS · JSTOR · TWL |
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See Talk:Retirement plan |
To-do list for 401(k):
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This page has archives. Sections older than 90 days may be automatically archived by Lowercase sigmabot III. |
Hanging sentence: "...these contributions are made on an after-tax basis and all earnings."
Under the heading Taxation, I don't understand the statement "Earnings from investments in a 401(k) account in the form of capital gains are not subject to capital gains taxes."
That seems to be misleading. All profits in a 401k are subject to normal income taxes upon withdrawal, excepting possibly for a special provision called NUA for company stock inside a 401K.
I am thinking the original author is probably trying to say, compared to mutual funds which often have annual capital gains distributions with tax liability, 401K allows savings to accumulate tax-deferred until withdrawal.
So the first sentence should say: "Income taxes on pre-tax contributions and investment earnings in the form of interest and dividends add: and capital gains are tax deferred."
Upon withdrawal all 401K gains are taxed as normal income (short term gains tax treatment), excepting for a special provision called NUA which allows favorable tax treatment (lower long term gains tax rates) for certain company stock gains, subject to the NUA rules.
TBILLT (
talk) 16:22, 10 July 2018 (UTC)TBILLT
174.7.167.228 ( talk) 13:14, 15 August 2020 (UTC)
This can be readily seen by simple calculation. — Preceding unsigned comment added by 159.118.108.99 ( talk) 18:50, 3 November 2018 (UTC)
starts from the 400 billion dollar medical expenses, and the one man that started it. — Preceding unsigned comment added by 208.89.33.32 ( talk) 18:28, 6 October 2021 (UTC)
KiwiSaver isn't a tax deferred arrangement (it has no tax offset or effect on your net income). The statement in paragraph two of Other Countries implies that KiwiSaver is an equivalent scheme to a 401(k) (noting that the UK and Australia do have similar, albeit not identical, schemes). Happy to discuss, but I'm going to remove the NZ reference unless there is a specific point to it being a comparison (that NZ does not have an equivalent). Roche-Kerr ( talk) 00:45, 25 April 2024 (UTC)