MovieChat Forums > Get Hard (2015) Discussion > What was pre tax?

What was pre tax?

posted 8 years ago by limbo-7
1 reply | jump to latest

I want to know what Jojo was talking about in the pre tax conversation.

The gang member with the beard was going on about how he couldn't tell the difference between two different terms, to which Jojo replied "The sh** is pre tax.".

I couldn't make out the terms he said when he said he couldn't tell the difference between them. They were obviously financial terms.

Does anybody know what he was talking about?

I should have known those alien maggots booby trapped this sub

[–] aqib4 8 years ago

A traditional IRA the contribution is deducted from your income. So if you make $50K and contribute $2k you're taxed $48K. But when you retire you pay income taxes on whatever you withdraw. A Roth IRA you don't get a deduction when you put your money in but when you take it out you don't pay income taxes.