I opened a new 401k acct. and received a cash bonus for doing so. The bonus was deposited into the 401k

[ColeenD3]

Regardless of what you did with the income, it is still taxable. Include it as other income with some variation of the words "account opening bonus".

Follow these steps to enter other income.

• Federal Taxes ->
• Wages & Income ->
• I'll choose what I work on -> scroll to the bottom and under 
• Less Common Income select Start (or Update) for 
• Miscellaneous Income
• Other reportable income and you can enter your own description(s) and amount(s)

[fanfare]

Just report whatever numbers you see on your W-2.

It's not other income.

[l-tasaka]

Let me clarify. The financial institution (Etrade) gave me a cash bonus for opening my new Solo 401K account with them and put the cash bonus into my 401K account. I thought only earned income could go into a 401K account and I am wondering if they did that incorrectly and what the repercussion are with the IRS. Should it have gone into a brokerage account instead and taxed as interest income? Or does it remain in my Solo 401K to be invested to grow tax free?

[dmertz]

Sounds like investment gains to me.

Money in the traditional account in your Solo 401(k) grows tax deferred, not tax free, so if this money went into the traditional account in the 401(k), it will eventually be taxed.  In a 401(k), only in a designated Roth account are gains tax free (and not until you have reached age 59½ and have had the account at least 5 years).