Entering Roth Contribution

[DavidJ726]

Hi,

Just for clarification, Box 12 of my W2 shows withholdings for Elective deferrals to a 401(k) which includes the following:

D - Elective deferrals to 401(k)  <<  Federal TSP

AA - Roth Contributions to 401(k) plan  <<  Federal TSP  Roth

I believe that I only need to enter the AA - Roth Contributions in Retirement & Investment section of Turbo Tax,  correct?   Traditional 401k contributions don't get entered anywhere from what I can see.

Thanks,

David

[DavidD66]

You need to enter both - Code D and and Code AA in the Box 12 section of the W-2 entry.  Neither of them should be entered anywhere else on your return.  AA indicates a salary deferral (contribution) to a Roth 401(k),  Although very similar, that is not the same thing as a Roth IRA.  

[DavidJ726]

DavidD66,

Thanks for the response.  So just to be clear, these vales were automatically entered into the W2 when I completed the W2 import from the National Finance Center.

So since you're saying I don't need to enter the contributions in the Deductions and Credits / Retirement and Investments portion of the return, can I assume this portion of Turbotax is only for other Roth contributions that's not based on a payroll deduction?

Thanks again,

David

[ThomasM125 · Accepted solution]

You are correct. What happens is for a traditional retirement plan contribution through your employer, your taxable wage income, as reported in box 1 on your W-2 form,  is reduced by the amount of your contribution. That is how you get your tax-favored treatment of the contribution. In addition to that, you can sometimes make another tax deductible contribution on your own, and that is where you would use the IRA contribution routines in TurboTax.

The ROTH retirement plan contributions are not deductible, but they still show on your W-2 and you can somtimes make your own contribution to them in addition to what you do through your employer. In either case, you only need to enter your W-2 form to report your retirement plan contributions through your employer.

[DavidJ726]

Thanks again David, I appreciate the clarity!