If you are not contributing the maximum amount of matchable funds to your 401k, that is always the way to go first, since (in your case) every $4 equals $5 invested. If you don't get a match, an HSA (if eligible) is slightly better than the 401k.
Be aware, of course, that this is money you can't spend for the next 30 years or so. If your income was $160,000, the phase out would knock $500 of your child tax credit and another $500 off the recovery rebate. You would be investing $10,000 (that you can't get back for 30 years) to save $1000 now. With the tax savings on the 401K, you would actually see a decrease in your take-home pay of $7000, to save $1000 on the rebates. That's $6000 less in your pocket now, but with $12,000 invested that will likely turn into $100,000 by retirement. It's an awesome savings opportunity, but make sure you can do without that $6000.
(And if you can do without that $6000 take home pay, keep your 401k contributions up even after January 1, 2022.)
