401k contributions are subject to SS and Medicare tax.

Curiously, however, pre-tax dependent care and pre-tax
health care spending plans are NOT subject to SS/Med tax.

This creates some interesting opportunities for reducing
your taxes. For example, I do not qualify for an income tax
deduction of my dependent care expenses, because I am
divorced and do not have primary custody. Nevertheless, I
have set up pre-tax dependent care account to be deducted
from my paycheck to the fullest extent under the law
(Currently $5k annually.) I then submit the copies of the
paid child care receipts and receive the tax free cash
reimbursement.

When I file my form 1040 at the end of the year, becuase I
am not entitled to receive an income tax benefit for the
dependent care account, I have to add the amount back to my
gross wages and pay income tax on it, thereby losing the
advantage of the dependent care account for income tax
purposes. However, I do NOT have to add it back for SS/Med
tax purposes, becuase there is no annual filing/reporting
for those taxes.... so I neatly lower my tax bill by the
amount of SS/Med taxes applicable to $5,000.

Unfortunately lately I've been making well over the SS
maximum anyway, so I only get this benefit on the measly
Medicare amount... but hey, free money is free money.

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"Arthur L. Rubin" <ronnirubin[at]sprintmail.com> wrote:
- quote -

Thanks for all the comments here. There seems to be a
consensus on "before" :-)

--
To reply to me directly, remove the XXX characters from my email address.

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- quote -

It is calculated on the gross income BEFORE the 401k
deduction. Same thing goes for the employer portion.

Bruce Raskin, CPA
Small Business and Individual Tax and Accounting Services

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"Vic Dura" <vpdura[at]XXXhiwaay.net> wrote:

- quote -

Before.

--
David M. Woods, EA, ChFC, CLU
Woods Financial Services
Norwood, MA 02062
www.woods-financial.com

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Vic Dura <vpdura[at]XXXhiwaay.net> wrote:

- quote -

Before. The 401k contribution is subject to FICA.

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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Vic Dura <vpdura[at]XXXhiwaay.net> wrote:

- quote -

BEFORE 401K contribution. No income tax is calculated on the
amounts contributed to the plan. Compare the Box 1 and Box
3/5 amounts on the TP's W-2 form. Also, look at Box 12.

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- quote -

Before. See IRS Publication 15.

Phil Marti
Topeka, KS

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Vic Dura <vpdura[at]XXXhiwaay.net> wrote:

- quote -


Before.... 401k is tax exempt (Fed. and State),
it is NOT SS and Medicare exempt.

Missy Doyle

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"Vic Dura" <vpdura[at]XXXhiwaay.net> wrote:

- quote -

B4 - that's why Social Security & Medicare Wages shown in
Boxes 3 & 5 are greater than Taxable Wages shown in Box 1.

Gene E. Utterback, EA

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- quote -

SS tax is paid based on the gross wages, without any
consideration for amounts contributed to retirement plans.

"Jack" - John H. Fisher - TaxService[at]aol.com
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

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Vic Dura wrote:

- quote -

Before for the ss and med tax for the employer and employee.

--
Frederick E. Jorden http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207 Richmond, VA 23235-5247
EMAIL knowtax[at]bigfoot.com
(804) 320-6210 FAX (804) 320-6211

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Vic Dura wrote:

- quote -

Before.

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Can anyone tell me if employee SS tax is calculated on wages
before or after 401k contributions?

Thanks for your help.

Regards,
Vic Dura

--
To reply to me directly, remove the XXX characters from my email address.

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