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Returning Member
posted Mar 16, 2020 5:29:59 PM

401K

my husband has an IRA with fidelity through a 401k at work. when i was looking for tax statements it says there are none. what do i report? He contributed $8124. to this 401K. will there be a penalty for being over $7000.00?

 

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5 Replies
Level 15
Mar 16, 2020 5:33:24 PM

A 401K is not an IRA.  You only enter it from his W2 box 12.  You can't deduct it.  It has already been deducted from the wages in box 1 and you can't deduct it again.  Do not enter it under Deductions as a IRA contribution.

Returning Member
Mar 16, 2020 5:36:13 PM

where do i report the dividends and interest. we did not get any 1099's from fidelity

Level 15
Mar 16, 2020 5:38:38 PM

No.  You do not report sales, interest, dividends,gains, losses or any transactions inside the IRA or 401K accounts.  You only report distributions, Rollovers, Transfers, conversions that you get a 1099R for.  That's one of the benefits of using an IRA or 401K Account.  It grows tax deferred.

Returning Member
Mar 16, 2020 5:41:39 PM

does the same apply to 403B for nonprofit 

 

Level 15
Mar 16, 2020 5:47:48 PM


@PattiB34 wrote:

does the same apply to 403B for nonprofit 

 


The whole purpose of a tax-advantaged retirement account is that your contributions go in pre-tax, and you then pay income tax on whatever you withdraw.  You don't pay any attention to transactions that occur within the account over the years.  Increases in value are not taxes, losses are not deducted, and dividends are not taxes as long as they are reinvested within the plan.  You simply pay income tax on whatever you are able to withdraw.  That's true for 403(b), 401(k) and all the other alphabet plans.  

 

(If you have a post-tax arrangement, sometimes called a "Roth 401(k) or "pre-tax 401(k)" -- or 403(b), then you don't get any tax deductions on the deposits, but you get to withdraw the money tax free once you meet eligibility requirements.  And you still ignore daily or yearly gains, losses and dividends.)

 

Any work sponsored plans are taken care of on your W-2.  You only get tax forms if you withdraw money or roll it over to another plan.  Work plans are never entered again as IRAs.