How to Deal With 403b Contributions on Tax Return
- 1). Examine your W-2 form to see if your contributions are reported there. All contributions to any kind of qualified plan should be listed in box 12 of your W-2 form. The reportable amount of your income in box 1 should be reduced by this amount accordingly. Compare the numbers in boxes 1 and 3; the difference between them will usually equal your total contribution amount for the year.
- 2). Do not count any after-tax contributions that you made. These contributions are nondeductible and should not reduce your Adjusted Gross Income.
- 3). Do not be confused by the absence of a line to report your contribution on the 1040. The deduction has already been taken, so to speak, on your W-2 form. Therefore you entered the reduced amount on the first line of the 1040.
- 4). Check your 403(b) year end statement to verify that the amount that your statement reports as your annual pretax contribution equals the amount reported on your W-2 form. Notify your employer immediately if these two amounts differ in any way.
- 5). Remember that you will not be entitled to a deduction if you participate in a Roth 403(b). If your plan has a Roth feature and your W-2 shows a deduction in your box 1 income, notify your employer immediately.
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