When employees contribute to a Roth 401(k), they _____ allowed to deduct the contributions and they _______ taxed on distributions from the plan. Select one: a. are, are not b. are, are c. are not, are not d.
When employees contribute to a Roth 401(k), they _____ allowed to deduct the contributions and they _______ taxed on distributions from the plan. Select one: a. are, are not b. are, are c. are not, are not d.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
When employees contribute to a Roth 401(k), they _____ allowed to deduct the contributions and they _______ taxed on distributions from the plan.
Select one:
a.
are, are not
b.
are, are
c.
are not, are not
d.
are not, are
Expert Solution
Step 1
Roth 401(k) is a special type of plan which is organized by the employer for employee retirement.
Under this plan whatever contribution is made is taxable and withdrawal on maturity is tax free.
Under this plan any employee who wants to associates with Roth 401(k) agree for automatic payroll deduction which is transferred to this special account.
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