Understanding 403(b) and Roth 403(b) Tax Deductions for Non-Profit Employee
So I started working for a non-profit last year (my first real grown-up job!) and I'm trying to figure out this retirement account situation. My employer offers both a 403(b) (they called it a TSA - Tax Sheltered Annuity) and a Roth 403(b) option. They match my contributions to the regular 403(b) which is awesome. I've been putting money into both accounts this year - about $13k total between them. Now I'm getting ready to file my taxes using TurboTax and I'm confused about the tax deduction part. Do my contributions to these accounts count as tax deductions? And if they do, where exactly do I enter this on TurboTax? I'm totally new to all this retirement and tax stuff so any help would be super appreciated!!
19 comments
Join the conversation
Ethan Taylor
Your traditional 403(b) contributions definitely reduce your taxable income! That's one of the main benefits - the money goes in pre-tax, so your W-2 should already show a lower taxable income amount in Box 1 compared to your actual salary. The Roth 403(b) contributions work differently though. Those are made with after-tax money, so you don't get a tax deduction now. Instead, the benefit comes later when you retire - you can withdraw that money (including all the growth) tax-free! When using TurboTax, you don't need to manually enter your 403(b) contributions as deductions. Your employer has already adjusted your W-2 to reflect the pre-tax contributions to your traditional 403(b). The software will guide you through entering your W-2 information, and the tax benefit of your traditional 403(b) is automatically included.
0 coins
Yuki Ito
•Wait, I'm confused. What if my W-2 doesn't show the difference? I also work for a non-profit and my box 1 on my W-2 seems to be my full salary. Does that mean they messed up? Should I be keeping track of my 403b contributions separately to claim them?
0 coins
Ethan Taylor
•If your W-2 Box 1 shows your full salary without reducing it by your traditional 403(b) contributions, there might be an error. Your employer should be excluding your pre-tax 403(b) contributions from the wages reported in Box 1. However, these contributions should still be included in Boxes 3 and 5 for Social Security and Medicare wages. You can verify this by checking Box 12 of your W-2, where your 403(b) contributions should be listed with code "E". If you don't see this or the numbers don't match up with what you contributed, definitely contact your payroll department as they may need to issue a corrected W-2.
0 coins
Carmen Lopez
I had a similar situation last year with my 403(b) and Roth accounts. I found this tool called taxr.ai (https://taxr.ai) that was super helpful for figuring out all the retirement account stuff. It analyzed my W-2 and payroll docs and actually caught that my employer had miscoded some of my contributions! It explained exactly how my 403(b) contributions affected my taxes and confirmed what the previous commenter said - traditional 403(b) contributions are pre-tax and reduce your taxable income automatically, while Roth contributions don't give you an immediate tax break but grow tax-free.
0 coins
AstroAdventurer
•How exactly does taxr.ai work? Does it connect to TurboTax or is it a separate thing? I'm always nervous about giving my tax documents to random websites.
0 coins
Andre Dupont
•I'm kinda skeptical about these tax tools. How does it actually help beyond what TurboTax already does? I mean, TT already walks you through all this stuff, right?
0 coins
Carmen Lopez
•It doesn't connect directly to TurboTax - you upload your documents and it analyzes them to explain what everything means and if there are any errors or deductions you might miss. It's actually really secure with bank-level encryption and doesn't store your docs after analysis. It goes way deeper than TurboTax in explaining the "why" behind everything. TurboTax just asks questions and fills in forms, but taxr.ai actually explains how retirement contributions affect different parts of your taxes and flags potential issues. For example, it caught that my employer had miscoded some contributions which would have caused problems later.
0 coins
Andre Dupont
I was hesitant about taxr.ai but tried it anyway before filing my taxes this year. Actually saved me from a major headache! Turns out my employer had been coding my 403(b) Roth contributions incorrectly on my paystubs. The tool flagged this immediately and explained that this could cause issues with the IRS later. The breakdown it gave me about how my retirement accounts affected my tax situation was super clear - way better than the generic info I got from my HR department. It showed exactly how my traditional 403(b) reduced my taxable income while explaining why my Roth contributions didn't. Definitely gave me more confidence when filing. And now I actually understand the difference between my accounts instead of just blindly contributing.
0 coins
Zoe Papanikolaou
For anyone struggling to get answers about 403(b) tax questions - I had the worst time trying to reach the IRS to clarify some retirement contribution issues. After being on hold for hours, I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes! They have this demo video showing how it works: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed that traditional 403(b) contributions reduce your taxable income automatically and explained exactly how the reporting works on W-2s. She also clarified the limits for combined contributions if you're using both traditional and Roth 403(b) accounts.
0 coins
Jamal Wilson
•How does Claimyr even work? The IRS phone lines are notoriously impossible to get through. Is this some kind of premium line or something? Sounds too good to be true tbh.
0 coins
Mei Lin
•Yeah right. I've been trying to talk to someone at the IRS for THREE MONTHS about my 403(b) rollover issue. No way this actually works. If it does, they probably charge like $100 for the call or something crazy.
0 coins
Zoe Papanikolaou
•It's actually pretty clever - their system basically navigates the IRS phone tree and waits on hold for you. When they reach an agent, you get a call to connect with them. It's like having someone wait in line for you. They don't have special access or a premium line - they're just using technology to handle the painful waiting part. I was skeptical too but it literally saved me hours of hold time, and I finally got clear answers about how my 403(b) contributions affect my tax situation. They do charge a fee for the service but considering I had already wasted hours trying to get through myself, it was completely worth it.
0 coins
Mei Lin
OK I have to eat my words here. I tried Claimyr after posting that skeptical comment, and I'm honestly shocked. Got connected to an IRS agent in about 20 minutes after spending weeks trying on my own. The agent walked me through exactly how my 403(b) and Roth 403(b) contributions should be reported and verified that my employer had been handling the W-2 reporting incorrectly. Turns out I was right to be confused - my traditional 403(b) contributions weren't being properly excluded from my taxable wages in Box 1. Now I'm getting a corrected W-2 and will actually get a larger refund. Would have been completely lost without getting to speak to someone directly at the IRS.
0 coins
Liam Fitzgerald
Just to add to what others have said - make sure you're aware of the contribution limits for 403(b) plans. For 2025, the total limit for combined traditional and Roth 403(b) contributions is $23,000 if you're under 50. That $13k you mentioned is well under the limit so you're good! Also, don't forget to check if your employer offers a 457(b) plan too. Many non-profits do, and you can contribute to BOTH a 403(b) and a 457(b) up to the full limit for each, effectively doubling your tax-advantaged space!
0 coins
Aisha Khan
•Thanks for this info! My HR mentioned something about a 457(b) during orientation but I was already confused by the 403(b)/Roth options so I didn't pay much attention. Are there any downsides to 457(b) plans compared to 403(b)? And would employer matching count toward that $23,000 limit you mentioned?
0 coins
Liam Fitzgerald
•The main difference with 457(b) plans is that they're technically deferred compensation plans rather than qualified retirement plans. The great thing is you can withdraw from them without penalty if you leave your employer at any age (though you'll still pay income tax). They're a fantastic option if you can manage contributing to both. Regarding the limits, employer matching contributions don't count toward your $23,000 personal contribution limit! There's a separate, higher overall limit that includes employer contributions - around $69,000 for 2025. So you can contribute your $23,000 and still get employer matching on top of that. It's one of the best perks of working for a non-profit with good benefits.
0 coins
GalacticGuru
Remember that your W-2 should have code E in box 12 showing your pre-tax 403b contributions. And if you've made any Roth 403b contributions, they should appear with code EE. This is how you can double-check that your employer reported everything correctly!
0 coins
Amara Nnamani
•Is code E always used for 403(b)? I have code D on mine and was told that's for 401(k) contributions. Are they basically the same thing for tax purposes?
0 coins
Isaac Wright
•Yes, code E is specifically for 403(b) contributions while code D is for 401(k) contributions. They work essentially the same way for tax purposes - both are pre-tax retirement contributions that reduce your taxable income. The difference is mainly in the type of employer (non-profits and educational institutions typically offer 403(b) plans, while for-profit companies usually offer 401(k) plans). So if you have code D, that's correct for a 401(k) plan!
0 coins