before-tax contribution - Investment & Finance Definition
The part of an employee’s salary that is contributed to a retirement plan before federal income taxes are deducted. Before-tax contributions reduce the taxpayer’s gross income for federal tax purposes. A withdrawal from an account funded with before-tax contributions becomes taxable at the time of withdrawal.Webster's New World Finance and Investment Dictionary Copyright © 2010 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.