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Employer contrib - tax question
Old 02-13-2010, 10:24 AM   #1
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Employer contrib - tax question

I am curious - does an employer match on a 401k show up in 'gross pay' on the tax forms at the end of the year , then offset by the 401k amount?

eg:

50,000 earned income
2,500
------
52,500 gross pay?

but then

if I contributed 5,000 to the 401k, the amount would be

-5,000
-2,500
-------
-7,500

*does it affect my limit on the amount I can contribute?



or is it magic money?

ta,
mew
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Old 02-13-2010, 10:28 AM   #2
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It is magic money.


It does not affect the amount you can contribute.
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Old 02-13-2010, 10:34 AM   #3
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Thanks! Just checking

(I wish I had more magic money in my life, :::sigh::: )

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Old 02-13-2010, 12:12 PM   #4
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A FSA (flexible spending account) is more magic money because no FICA, medicaid, and income taxes are removed from it.
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