A section 401(k) plan is a type of tax-qualified deferred compensation plan in which
an employee can elect to have the employer contribute a portion of his or her cash
wages to the plan on a pre–tax basis. These deferred wages (commonly referred
to as elective deferrals) are not subject to income tax withholding at the time
of deferral, and they are not reflected on your Form 1040 (PDF) since they were
not included in the taxable wages on your Form W-2 (PDF). However, they are included
as wages subject to social security, Medicare, and federal unemployment taxes.
A well-designed 401(k) plan can help attract and keep talented employees.
It allows participants to decide how much to contribute to their accounts on a before-tax
basis.
Employers are entitled to a tax deduction for their contributions to employee's
accounts.
A 401(k) plan benefits a mix of rank-and-file employees and owner/managers.
The money contributed may grow through investments in stocks, mutual funds, money
market funds, savings accounts, and other investment vehicles.
Contributions and earnings generally are not taxed by the Federal government or
by most State governments until they are distributed.
A 401(k) plan may allow participants to take their benefits with them when they
leave the company, easing administrative burdens.
Lets us do an analysis for you to determine the type of plan that will best meet
your companies needs
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