457b deferred comp counted as income

Using sample numbers, my wages were $115K and I contributed $40K to a 457b deferred comp plan. This is recorded with Turbo Tax for item 12a "G", 40K. However, when Turbo Tax provides my taxable income summary at the end of the process, it still shows $115K and not $75K (i.e. $115K less $40K). I am facing payment of both federal and state taxes (and a federal penalty). How can I tell if Turbo Tax is erroneously basing my tax owed on my full wages of $115K and ignoring that I deferred $40K to a qualified tax-advantage program?

3235

Level 15

Apr 11, 2024 1:51:59 PM

Your employer will already have excluded the code-G amount from the amount of wages shown in box 1 of your W-2. You are not permitted to exclude the same amount from income a second time.

(If your employer failed to excluded the code-G amount from your wages shown in box 1, contact the employer to obtain a correction.)

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457b deferred comp counted as income