Roth vs. Traditional 401(k): How Each Impacts Your Taxes

When it comes to taxes, not all 401(k)s are created equal. This article breaks down the key differences in tax treatment between Roth and Traditional 401(k) accounts, especially when it’s time to take distributions. We explain how contributions are taxed (or not), what happens when you withdraw funds, and how each account shows up on your tax forms. You'll learn how Roth 401(k)s can offer tax-free withdrawals in retirement, and how Traditional 401(k)s affect your taxable income. We also touch on required minimum distributions (RMDs) for both account types, and which strategy might make more sense depending on your income level and retirement goals. If you’re planning your withdrawals or just trying to understand what tax bill you might face, this guide will help you make smarter, tax-efficient decisions. Get clarity on how your retirement savings will impact your taxes—now and in the future.