Increasing your 401k deduction will DECREASE your take home pay and DECREASE your federal taxes in the current year. 401K deduction refers to the money which is automatically deducted from employees' paycheck during pay periods. The money is usually deducted before the tax is calculated and is use for investment purposes for the employee. If one increases his 401K deduction, the take home amount will decreases and the amount of taxes one will pay will also decreases.
