401 Contributions and Lower Adjusted Gross Income

[JIMPATCH]

My W-2 accurately reflects my total income as well as my 401K contributions (of $25,000; the maximum) however I don't see a corresponding $25,000 reduction in Adjusted Gross Income that my 401K should result in.  Why? 

[AlexanderS08]

Are you saying that Box 1 of your W-2 should be $25,000 less? Box 1 is the amount that goes to the "Adjusted gross income" for your return.

Is it possible that you contributed to a Roth option? Roth contributions are not pre-tax which means they do not reduce your wages. The benefit comes with the withdrawals as all distributions are tax free since you did not reduce your taxable income.

On the other hand, if you make a pre-tax contribution, the entire distribution is taxable when withdrawn.

[dmertz]

Your employer reduces the amount that would otherwise be in box 1 of your W-2 by the amount reported with code D in box 12 of your W-2, so the reduction in income is not calculated anywhere on your tax return.  The amount deferred to the 401(k) never gets added to your income on your tax return to begin with.