What is a true statement about a 401k deduction?(1 point) Responses It is a contribution to the workers retirement account It is a contribution to the workers retirement account It is subtracted from the gross income resulting in lower taxes It is subtracted from the gross income resulting in lower taxes It is a mandatory deduction It is a mandatory deduction It is an involuntary deduction It is an involuntary deduction A and B
A and B
A and B are both true statements about a 401k deduction. It is a contribution to the worker's retirement account, and it is also subtracted from the gross income resulting in lower taxes.
The correct answer is A and B:
1. A true statement about a 401k deduction is that it is a contribution to the worker's retirement account. This means that a portion of the worker's salary is set aside and invested in a retirement savings plan.
2. Another true statement about a 401k deduction is that it is subtracted from the gross income resulting in lower taxes. When an employee makes contributions to their 401k, it reduces their taxable income, which in turn decreases the amount of income tax they owe.
It's important to note that while a 401k deduction is a common practice in retirement saving and tax planning, it may not be mandatory for all workers. Some employers may offer a 401k plan as an optional benefit, and employees can choose whether or not to contribute to it. So, statements 3 and 4, which mention "mandatory deduction" and "involuntary deduction," are not necessarily true for all cases.