21 Jun What do I have to report about my 401(k) to the IRS?

Q. With my 401(k), for my tax return, do I have to report my contributions or only when I take money out? What do I have to report?
— Trying to do it right

A. We’re glad you’re saving for the future.

And we’re also glad you want to make sure you are keeping records and reporting what needs to be reported.

If you’re using a software like TurboTax, you will be prompted to include your taxable income from form W-2, said Evan Drury, a chartered financial consultant with U.S. Financial Services in Fairfield.

“Contributions are not listed on your 1040 as they have already been taken out of your paycheck before being taxed and are not counted as taxable income,” he said. “This is reported to Uncle Sam on your W-2 Form which you don’t need to take any action on.”

Distributions would be put under 4a and 4b of Form 1040 depending on the tax nature of the distributions, Drury said, noting that you could have before- and after-tax treatment within the IRA.

“I highly recommend using a CPA to complete your tax return so that you don’t misfile and run into issues in the future,” he said. “It’s not worth future headaches to try to do this on your own.”

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This story was originally published in June 2024.

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