Saturday, November 12, 2011

I'm currently in the 25% tax bracket, when I'm placed in the 15% bracket (401k) where do I see the change in $?

Lets say my taxable income is $34,000 (25% tax bracket), if I contribute pretax dollars to my 401K, it will place me in the 15% tax bracket ($8,375-$33,999). Does the dollar amount of now being taxed less show on my bi-monthly paychecks or will my paychecks tax percentage remain the same? Or does the difference only show up on my tax return? What/Where do I see the changes?

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