Do I have to claim 401K investment earnings on my tax return?

Question

I think I earned about $90 on my 401K portfolio from my summer internship. Do I claim that and if so, where?

Answer 1

Disregard the answer from girl, you do not have to include the money contributed to your 401K unless it is in excess of the max allowed ($15K). Therefore, neither the investment earnings nor the contributions are taxable. On your W-2, the contributions to your 401K would not have been included in Box 1 for Wages, but instead placed in Box 12. You will pay tax on both the original contribution and the investment earnings when you take distributions from the plan, but presumably at that time you will be unemployed (retired) and have less income.

Answer 2

401K money is tax free until you withdraw it from the account. If you did that then there are penalties and taxes to pay. (I'm assuming you are not 59 1/2 years old )

The 401K money is shown on the W2 all you have to do is follow the instructions when filling in your tax forms.

Answer 3

99.9% of people make only pre-tax contributions to their 401K, so they have no basis in the account. If you are one in a thousand and actually do have after-tax contributions, when you finally draw the last dollar from the account and can prove you have a loss on the after-tax money, then and only then would you be able to take a schedule A deduction for the loss.

Answer 4

No - you do not claim your earnings - only the amount that you put in (and that should be on your w-2 statement).

You may want to move that money to a Roth IRA - because you will pay the taxes once on the $90 earnings, but will never pay on the earnings again!

Answer 5

That's the joy of a tax deferred 401(k). Anything you earn within it is tax free until you withdraw the money at retirement age. How cool is that?

Answer 6

No, you don't pay taxes on the money in a 401K until you withdraw it. In the meantime, it grows tax-deferred.