Can I claim IRA and 401k deductions on my 2025 tax form 1040?

Thanks for explaining that. So if I understand correctly, my 401k contributions are already accounted for in my W-2 Box 1 amount, meaning the IRS already knows about them? Does this mean I don't need to do anything extra regarding my 401k when filing? Also, I did put about $2,500 in a traditional IRA this year separate from my 401k. So for that amount, I would need to fill out Schedule 1, Line 20? Are there income limits I should be aware of?

Yes, you're understanding correctly. Your 401k contributions are already handled through your payroll and reflected in your W-2, so no additional reporting is needed for those. For your traditional IRA contribution of $2,500, you'll report that on Schedule 1, Line 20. And yes, there are income limits for deducting IRA contributions when you have a workplace retirement plan. For 2025, if you're single, the deduction begins to phase out at a modified adjusted gross income (MAGI) of $78,000 and is eliminated at $88,000. If you're married filing jointly, the phase-out range is between $129,000 and $149,000. If your income is below these thresholds, you can take the full deduction.

Does it actually tell you which forms to fill out and where to put the numbers? I'm using TurboTax but it keeps asking me questions about my IRA that I don't understand.

I'm a bit skeptical about these tax services. How does it compare to something like TurboTax or H&R Block? Does it actually file your taxes or just give advice? And how secure is it to upload all my financial documents?

It actually guides you through exactly which forms you need and where specific numbers should go. I had the same issue with TurboTax asking confusing questions, but taxr.ai broke it down so I knew exactly how to answer them. Yes, it's different from TurboTax or H&R Block because it's more focused on document analysis rather than filing. It helps you understand your tax situation before you file. As for security, they use bank-level encryption and don't store your documents after analysis. I was hesitant too but after reading about their security measures I felt comfortable using it.

How does this service actually work? Do they somehow get you to the front of the IRS phone queue? I've tried calling multiple times and always hang up after being on hold for 45+ minutes.

Yeah right. No way this actually works. The IRS phone system is designed to be impossible to navigate. I'll believe it when I see it. Sounds like just another service trying to make money off people's tax frustrations.

They use a system that continuously calls the IRS and navigates the phone tree for you. Then when an agent is about to answer, they connect the call to your phone so you don't waste time waiting on hold. I was super skeptical too before trying it. I had spent over 3 hours on hold the previous week and never got through. I honestly didn't think it would work either, but I was desperate for answers about my IRA deductions. The service called me back in about 15 minutes and suddenly I was talking to an actual IRS representative. They don't guarantee a specific wait time since it depends on IRS call volume, but it was way better than doing it myself.

Wait, I'm confused about the Roth vs Traditional options. I thought Roth was always better because you don't pay taxes when you withdraw in retirement? Why would anyone choose Traditional?

Traditional vs Roth is about when you pay taxes, not if you pay taxes. With Traditional accounts, you get a tax break now (lower current taxes) but pay taxes when you withdraw in retirement. With Roth, you pay taxes now but get tax-free withdrawals in retirement. Traditional makes more sense if you expect to be in a lower tax bracket in retirement than you are now. For example, if you're in your peak earning years, you might benefit more from the immediate tax deduction. Roth makes more sense if you expect to be in the same or higher tax bracket in retirement, or if you want the flexibility of tax-free withdrawals later.

Yes! You can make IRA contributions for 2025 all the way up until the tax filing deadline in April 2026 (usually April 15th, but it can shift depending on weekends/holidays). Just make sure you specify to your IRA provider that the contribution is for tax year 2025.

That spreadsheet idea is brilliant! I wish I had thought of that earlier in the year. I've been scrambling to piece together all my contribution amounts from different sources. Quick question about the W-2 codes you mentioned - I'm looking at my W-2 now and I see Box 12 has code "D" with an amount, but I also see code "E" listed. Do you know what code "E" represents? I want to make sure I'm understanding all the retirement-related entries on my W-2 correctly before I finish filing. Also, regarding the Roth vs Traditional IRA decision for that $2,500 - is there a deadline to decide which type of contribution it should be, or can I change it after I make the contribution?

Great question about the W-2 codes! Code "E" in Box 12 represents employer contributions to a Section 457(b) deferred compensation plan, which is typically offered by government and some non-profit employers. This is separate from your 401(k) contributions and represents money your employer contributed on your behalf - similar to how employer 401(k) matching works. Regarding your $2,500 IRA contribution timing question - you typically need to specify whether it's Traditional or Roth when you make the contribution to your IRA provider. However, you do have some flexibility! You can recharacterize (convert) a Traditional IRA contribution to Roth, or vice versa, up until the tax filing deadline (including extensions). So if you made it as Traditional but realize Roth would be better after checking those income limits, you can still change it. Just contact your IRA provider and request a "recharacterization" - they'll handle the paperwork. Keep in mind that if you recharacterize from Traditional to Roth, you'll lose the tax deduction but gain the tax-free growth benefit for retirement.