Taxable Income Tax Rates
Question: My Taxable Income drops by 10% for FSA. For a lower Tax bracket? Is it time to max out Roth 401K contribution?
The idea on a Roth 401K is that you pay taxes now, and keep the Fed’s grubby paws out of it later. So if I legitimately max out my FSA at 10% for expected Ortho work. Would I now be in a lower tax bracket on the remaining income? Would this lower tax rate be an opportune time to invest heavily through the year on my Roth 401K as this is taxed at a lower rate? Kind of like buying shares at a slight discount. Thank you.
Answer: I agree with your logic that it makes sense to contribute to a Roth 401k when your tax rate is lower because you will pay less tax now on your contribution than if you waited for a year when your tax rate was high.
As for reducing your taxable income through the FSA, that would possibly make a slight difference. If you are close to crossing into a lower tax bracket after your FSA contribution, you have the option of putting some of your money into a traditional 401k to get your bracket down a notch, and then go for all of the Roth 401k designation that you can get at the lower bracket.
PNC Reports First Quarter Net Income of $671 Million
The PNC Financial Services Group, Inc. today reported net income of $671 million, or $.66 per diluted common share, for the first quarter of 2010. Net income would have been $744 million, or $1.31 per diluted common share, for the quarter excluding $.50 per diluted common share related to the redemption of TARP preferred shares and $73 million, or $.15 per diluted common share, for after-tax …
Lec. 3 – Corporate Income Tax
