It is getting toward the end of the year, but it is still not too late to make contributions to your 401K plan to reap the benefits of reduced taxes. The rules for Contributions, Distributions, and Phase Outs is below.
You can exclude contributions to a 401K from your wages up to the lesser of 100 percent of your wages or $16,500 ($22,000 if age 50 or over).
The distributions from a 401K plan are taxable. They may also be subject to the 10 percent penalty if early withdrawals are made from the plan.
They are not applicable for 401K plans. However, special rules apply for highly compensated employees.