When employees contribute to a traditional 401(k) plan, they ________ allowed to deduct the contributions and they ________ taxed on distributions from the plan.

Question

Quizplus · Accepted Answer

When employees contribute to a traditional 401(k) plan, they are allowed to deduct the contributions from their taxable income in the year the contributions are made. However, they are taxed on distributions from the plan when they retire or withdraw the funds. Therefore, they are allowed to deduct the contributions (are) and are taxed on distributions from the plan (are).

When Employees Contribute to a Traditional 401(k) Plan, They ________