401(k) Plans

Your traditional 401(k) contributions reduce your wages in Box 1 of your W-2. Since your income is already reduced by your 401(k) contributions, you do not get a separate deduction on your tax return for 401(k) contributions. However, lower-income taxpayers may be eligible for the Retirement Savings Contribution Credit for 401(k) contributions made. Our software will automatically calculate if you receive the Retirement Savings Contribution Credit based on the 401(k) contributions you enter in Box 12 of your W-2 and the income you enter on your tax return.

Do NOT report interest income, dividend income, capital gains, or any type of income from your 401(k) account. All investment income within a 401(k) retirement account is not taxable income on your tax return and does not get reported anywhere on your tax return. A 401(k) account is only taxed when you take a distribution from your 401(k) account and get a Form 1099-R.