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How is 401K pretax?

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"Pre-Tax" generally means that income to employee is diverted from income before being taxed.

This pre-tax event reduced income and, therefore, reduces Federal and State income tax at the marginal tax rates of the account-holder.

Roth contributions, however, are considered "after-tax". This concept essentially works in reverse. The funds are taxed before they go into the 401k account. However, the funds are generally withdrawn tax-free upon retirement.
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