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bcamp60
New Member

If I contribute to my 401k before payroll taxes can I still deduct my contribution.

 
1 Best answer

Accepted Solutions
MargaretL
Employee Tax Expert

If I contribute to my 401k before payroll taxes can I still deduct my contribution.

No, you cannot deduct 401K contribution as a separate deduction on your tax return.  All you have to do is report W2 data in Turbo Tax exactly as it appears on the form.

When making 401(k) plan contributions you elect to make come directly out of your salary. Since the contributions are made with pre-tax dollars, your employer does not include these amounts in your taxable income for the year. At the end of the year, when you receive your W-2 form that shows your earnings, you will notice that your wages subject to federal income (box 1) tax are lower because of your 401(k) plan contributions (box 12). Since the contributions are not counted in your taxable income to begin with, you do not take a deduction when you file your return.

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1 Reply
MargaretL
Employee Tax Expert

If I contribute to my 401k before payroll taxes can I still deduct my contribution.

No, you cannot deduct 401K contribution as a separate deduction on your tax return.  All you have to do is report W2 data in Turbo Tax exactly as it appears on the form.

When making 401(k) plan contributions you elect to make come directly out of your salary. Since the contributions are made with pre-tax dollars, your employer does not include these amounts in your taxable income for the year. At the end of the year, when you receive your W-2 form that shows your earnings, you will notice that your wages subject to federal income (box 1) tax are lower because of your 401(k) plan contributions (box 12). Since the contributions are not counted in your taxable income to begin with, you do not take a deduction when you file your return.

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