What is a true statement about a 401k deduction?(1 point)

Question

Responses

It is a contribution to the workers retirement account
It is a contribution to the workers retirement account

It is subtracted from the gross income resulting in lower taxes
It is subtracted from the gross income resulting in lower taxes

It is a mandatory deduction
It is a mandatory deduction

It is an involuntary deduction
It is an involuntary deduction

A and B
A and B

Answer 1

The correct response is A and B.

Both statements are true:

• A 401(k) deduction is a contribution to the worker's retirement account (A).
• It is also subtracted from the gross income, which results in lower taxes (B).

The other options regarding it being a mandatory or involuntary deduction are not accurate, as 401(k) contributions are typically voluntary, though some employers may automatically enroll employees in a plan.