Year-end Bonus Election for 401k. Roth or Pre-tax?

So I am getting paid my bonus next paycheck and we have to make our elections shortly. I was considering my options and according to my thinking it would be best to put as much of this bonus into the 401k as i can since bonuses are taxed at a higher level right? Right now I do both Roth 401k and normal pre-tax. I am wondering which account is more beneficial to contribute the bonus to? any info appreciated

i may be confusing myself on this...but on roth contributions since they are taxed up front....are they still taxed at the higher supplemental income rate upfront? thus negating the benefits on that...and making the pre-tax election more appealing for the bonus. is my thinking correct?

So I am getting paid my bonus next paycheck and we have to make our elections shortly. I was considering my options and according to my thinking it would be best to put as much of this bonus into the 401k as i can since bonuses are taxed at a higher level right?

More income tax is whithheld from the bonus check. This is because the payroll department uses the IRS withholding tables and your W-4 to determine how much should be withheld. The amount on the withhholding tables is correct if you were to receive your regular pay plus your bonus in each pay check. The bonus may push you into a higher taxing bracket, but the same could happen when you receive your next pay raise.

When you file your 2008 tax return, this will all balance out.



Right now I do both Roth 401k and normal pre-tax. I am wondering which account is more beneficial to contribute the bonus to? any info appreciated

i may be confusing myself on this...but on roth contributions since they are taxed up front....are they still taxed at the higher supplemental income rate upfront? thus negating the benefits on that...and making the pre-tax election more appealing for the bonus. is my thinking correct?

Generally, when the tax deduction today is more important than tax free income in retirement, contribute to the Traditional 401k.

When tax free income in retirement is more important than a tax deduction today, contribute to the ROTH 401k.