First time doing taxes - Do I need to report my 401k contributions?
Hey everyone! So I'm super new to filing taxes in the US (just moved here last year) and I'm confused about retirement accounts. My company (a startup I joined in October) set up a 401k for me with Vanguard, and I just got a statement in the mail. Looks like I put in about $215 and my employer added $95 in matching contributions. To be honest, I had no clue this was even happening! I was so focused on getting settled in a new country that I guess I missed some paperwork during onboarding. Here's what I need to know - do I have to report this 401k on my taxes? And if yes, do I report the amounts I contributed or the current balance (which is different since I actually took some money out recently...probably shouldn't have done that 🤦♂️). This is my first time doing US taxes and I'm totally lost! Any help appreciated!
20 comments
Join the conversation
Yuki Ito
Yes, your 401k does get reported on your taxes, but don't worry - it's actually pretty straightforward! The contributions you made ($215) should already be reflected on your W-2 form in a reduced Box 1 amount (taxable wages). This means your employer already accounted for this pre-tax contribution by reducing your taxable income. If you withdrew money from your 401k, that's different. You should receive a Form 1099-R that shows the distribution amount, and you'll need to report that as income. Plus, if you're under 59½ years old, you might have to pay a 10% early withdrawal penalty unless you qualify for an exception. The employer match ($95) doesn't affect your taxes right now - it's not considered part of your taxable income for the year.
0 coins
Carmen Lopez
•What if the company didn't put the 401k contribution on the W-2? Mine looks the same as my regular paychecks. Do I need to call HR or something?
0 coins
Yuki Ito
•If your contributions don't appear to be reflected on your W-2, it's worth double-checking with your payroll department. Sometimes, especially with mid-year enrollments, there can be confusion. Compare your last paycheck's year-to-date gross wages with Box 1 on your W-2 - there should be a difference approximately equal to your 401k contributions. For the withdrawal issue, you'll definitely need that 1099-R form to properly report it. If you haven't received one yet and you took the withdrawal last year, contact the 401k administrator (Vanguard in your case) as they're required to send it for any distributions.
0 coins
Andre Dupont
I was in the exact same situation last year! After struggling with tax forms and getting conflicting advice from friends, I tried this AI tool called taxr.ai and it was incredibly helpful. I uploaded my W-2 and the 401k statement from my provider (Fidelity in my case) and it explained exactly what I needed to do. The tool specifically highlighted the 401k contributions on my W-2 and explained how they were already accounted for in Box 1. For my withdrawal, it identified that I needed the 1099-R and even calculated the potential penalty. Check out https://taxr.ai if you're confused - it's like having a tax expert explain your specific documents in plain English.
0 coins
QuantumQuasar
•Does this taxr thing work with other retirement accounts too? I have a 403b from my teaching job and always get confused about reporting it properly.
0 coins
Zoe Papanikolaou
•How accurate is it really? I've tried other tax help services before and they missed some obvious stuff that ended up costing me.
0 coins
Andre Dupont
•It works with all kinds of retirement accounts - 401k, 403b, 457, IRA, Roth IRA, and more. The system recognizes the different tax forms and explains the specific rules for each type. For teachers with 403b plans, it even covers the special provisions that might apply to you. Regarding accuracy, I was skeptical too at first. What impressed me was that it actually caught a mistake my employer made on my W-2 where my retirement contributions weren't properly coded. It explained exactly what was wrong and how to get it fixed. The explanations aren't generic either - they're based on your actual documents and numbers.
0 coins
QuantumQuasar
Just wanted to update after trying taxr.ai for my 403b confusion. It was actually super helpful! Uploaded my documents and it immediately pointed out that my school district had incorrectly coded some of my contributions. Would have missed that completely. Even showed me where on my W-2 to look for the retirement contribution entries and explained how they affect my taxable income. Definitely saved me from making mistakes on my return!
0 coins
Jamal Wilson
If you had to withdraw from your 401k and now you're worried about taxes and penalties, you might need to talk directly with the IRS. I was in a similar situation and spent DAYS trying to get through on their phone lines. Eventually discovered this service called Claimyr that got me connected to an IRS agent in about 15 minutes instead of the hours I was wasting on hold. The agent explained exactly how to report my early 401k withdrawal and which form to use for claiming an exception to the penalty (I qualified for a hardship exemption). Seriously saved me hundreds in penalties! You can see how it works at https://claimyr.com or check out their demo at https://youtu.be/_kiP6q8DX5c - it's basically a service that navigates the IRS phone tree and waits on hold for you.
0 coins
Mei Lin
•Wait how does this actually work? Does it just call for you or something? I don't get it.
0 coins
Liam Fitzgerald
•Sounds like a scam tbh. Nobody can magically get through IRS phone lines faster. They probably just charge you to wait on hold the same amount of time.
0 coins
Jamal Wilson
•It works by using their system to navigate the complex IRS phone menus and then holds your place in line. When they reach an actual agent, you get a call back and are connected directly. So you don't have to sit through those awful hold times yourself - you can go about your day until an agent is available. The service doesn't "cut the line" or anything sketchy - they're just handling the frustrating waiting part for you. And honestly after spending literally 3+ hours on hold previously and getting disconnected twice, having someone else deal with that part was completely worth it. The IRS actually confirmed I qualified for a hardship exception on my 401k withdrawal, which saved me way more than what the service cost.
0 coins
Liam Fitzgerald
Alright I need to eat my words. I tried Claimyr because I was desperate to figure out my 401k withdrawal situation before filing. After my previous attempts where I waited over 2 hours and got disconnected, they actually got me connected to an IRS agent in about a half hour. The agent walked me through exactly how to report my withdrawal on Form 5329 and helped me understand which penalty exceptions might apply in my case. Turns out I qualified for the first-time home buyer exception which I had no idea about! Definitely saved me the 10% penalty on my withdrawal.
0 coins
Liam Fitzgerald
Alright I need to eat my words. I tried Claimyr because I was desperate to figure out my 401k withdrawal situation before filing. After my previous attempts where I waited over 2 hours and got disconnected, they actually got me connected to an IRS agent in about a half hour. The agent walked me through exactly how to report my withdrawal on Form 5329 and helped me understand which penalty exceptions might apply in my case. Turns out I qualified for the first
0 coins
Amara Nnamani
Just a quick tip on 401ks for newcomers to the US - if you're planning to stay in the country long-term, try not to withdraw from them early if possible! The penalties can be rough. I learned this the hard way last year.
0 coins
Ethan Taylor
•Thanks for the advice! Unfortunately I needed the cash for an emergency expense. Do you know if there are any exceptions to the penalty for certain situations?
0 coins
Amara Nnamani
•There are definitely some exceptions to the 10% early withdrawal penalty! Medical expenses that exceed 7.5% of your adjusted gross income can qualify for an exception. First-time home purchases (up to $10,000) are another exception. If you had qualified education expenses, those might also be exempt from penalties. Or if you were unemployed and needed the money for health insurance premiums. There's also exceptions for permanent disability or if you're withdrawing in substantially equal periodic payments. You'd need to file Form 5329 along with your tax return to claim any of these exceptions.
0 coins
Giovanni Mancini
Did u check box 12 on ur W-2? Should have a letter code D and the amount u contributed. That's how u know it's already accounted for in ur taxes. U don't report it seperately.
0 coins
NebulaNinja
•This is the right answer - check Box 12 with code D on your W-2. That shows the amount deferred into a 401k plan. Your Box 1 wages are already reduced by this amount, so the taxes on your contributions are already handled correctly.
0 coins
Fatima Al-Suwaidi
As an immigrant myself, I know how confusing US tax system can be! One more thing to know: those 401k statements usually show both contributions and earnings. The earnings (interest/investment gains) aren't taxed now either as long as u keep the money in the account. That's why these accounts r good for retirement saving!
0 coins