Taxes Made Simple

A reader asks: I contributed roughly $6,000 to my 401k this year. What I can't figure out is where I'm supposed to deduct that on my tax return. Any help would be appreciated.

Answer: In short, you don't. It doesn't show up anywhere on your 1040, because the amount you contributed has already been subtracted from the amount of wages reported on the W-2 that you received from your employer.

Depending upon your income, however, you may be eligible for an additional tax benefit relating to your 401k contribution. It's called the Retirement Savings Contribution Credit. Form 8880 will give you all the information you need to determine whether or not you're eligible.

Want to learn more about taxes? Take a look at my most recent book, Taxes Made Simple: Income Taxes Explained in 100 Pages or Less.