BillM223
Expert Alumni

Deductions & credits

"Yes I have a 401k not thru my employer that I put money from savings into."

 

Is this a "personal" or "solo 401(k)"? I.e., are you self-employed? You cannot contribute to a 401(k) plan unless you are employed or are self-employed. 

 

As noted below, if you are an employee, the 401(k) contribution is noted in box 12 with a code of D. If you are self-employed, it is listed on line 15 on Schedule 1 (1040). You enter this in the Business interview in Self-employed or Home & Business.

 

"Will the IRS know what the W-2 shows is a 401k account"

 

On a W-2 in box 12 a code D with a dollar amount indicates the amount that was contributed to your 401(k) plan. As you can see, this amount is subtracted from Wages in box 1, but not from Wages in boxes 3 and 5.

 

"I am really not sure if adding the amounts counts as a deduction thou?"

 

Contributions to a 401(k) plan are "deductible" in the sense that they are removed from income, that it, you are never taxed on these dollars in the first place.

 

 

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