Complex sentence: Like a 401 (k) plan, the SIMPLE IRA can be funded with pretax salary reduction and are subject to Social Security, Medicare, and Federal Unemployment Tax Act taxes.
Split into simpler sentences: Like a 401 (k) plan, the SIMPLE IRA is funded by a pretax salary reduction. Just as pre-tax contributions to a 401 (k), these salary reduction contributions are subject to Social Security, Medicare, and Federal Unemployment Tax Act taxes.