After-Tax Deduction

What is an After-Tax Deduction?  Definition below:

After tax deductions can include pension plans, 401(k) plans, union fees, life insurance policies or charitable donations.

Furthermore, a standard after-tax deduction can help to minimize the amount of tax liability by using a fixed-dollar amount. This can eliminate the need to itemize deductions or keep receipts of expenses.

An After-Tax deduction has advantages and disadvantages. As a benefit, the taxpayer will have a higher take-home pay. In turn, they will also have a higher tax liability.