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| *Loan,banking and credit>>>income tax |
Do I pay FICA taxes on 401k/Retirement account income? What percentage? |
Do I pay FICA taxes on 401k/Retirement account income? What percentage? No, however you do pay FICA on the funds going into the 401(k) even though you don't pay income tax on them. FICA is only levied on earned income, never on unearned income. Not when you take it out. You already paid the FICA on what you put in when you put it in, and the appreciation of the 401K isn't taxed for FICA. You will pay income taxes, though, on the money you withdraw from your 401K, if your total income is high enough to owe income tax. When you are contributing to your 401k, the first $97,500 of your wages are taxed at 7.65% for Social Security. Contributions to your retirement account are included. In addition, all your contributions are taxed 1.45% for Medicare. When you take a distribution from your 401k, you do not pay SS or Medicare again. However, your 401k distribution can cause your SS benefits to be taxed. |
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