How does matching your 401k help with tax refunds at the end of the year?

Question

I hear that you will get more refund? Please help me understand this.

Answer 1

If you contribute to a 401K, the part of your salary that you contribute isn't taxed that year, so your refund is larger.  You don't pay tax on it until you take it out of the 401k

Answer 2

  You may have funds deducted from your pay and set aside in a 401k retirement plan.  These funds can be deducted from your taxable income, up to certain limits, based on a couple of factors.  You employer may also provide "matching contributions", which increase the value of the retirement fund.

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Answer 3

The matching money from your employer is "free"--it isn't taxed, but it doesn't increase your refund.  It's your contribution that lowers your taxes.

Answer 4

Your contribution to 401(k) is tax deferred. Read http://taxipay.blogspot.com/2008/08/elec...