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Where Do I Deduct my 401k Contribution?

A reader asks: I contributed roughly $6,000 to my 401k this year. What I can’t figure out is where I’m supposed to deduct that on my tax return. Any help would be appreciated.

Answer: In short, you don’t. It doesn’t show up anywhere on your 1040, because the amount you contributed has already been subtracted from the amount of wages reported on the W-2 that you received from your employer.

Depending upon your income, however, you may be eligible for an additional tax benefit relating to your 401k contribution. It’s called the Retirement Savings Contribution Credit. Form 8880 will give you all the information you need to determine whether or not you’re eligible.

For More Information, See My Related Book:

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Taxes Made Simple: Income Taxes Explained in 100 Pages or Less

Topics Covered in the Book:
  • The difference between deductions, exemptions, and credits,
  • Itemized deductions vs. the standard deduction,
  • Several money-saving deductions and credits and how to make sure you qualify for them,
  • Click here to see the full list.

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