I have a 401(k) with my current employer and I just recently opened up a Roth IRA. Now what?

Question

I have a 401(k) with my current employer and I just recently opened up a Roth IRA. What is the process I must go through for my taxes next year? Is anything tax deductible?

Answer 1

For the both of these retirement programs there is nothing special to do, and you don’t even have to report it on your taxes.

401-k’s are deductible when you contribute to them and taxable when you withdraw you contributions. The best advantage of a 401-k is it is payroll deducted and your company will match part of what you contribute.
When you get your w-2 for the year you should notice that your wages, tips and other compensation is less than your social security wages. If you subtract wages from social security wages the result will be the amount you put into your 401-k program at work, there will be a section on the w-2 called other that should have a code D in it. Code D + wages should equal social security wages. In essence you get you tax deduction before it ever hits your return.

Roth IRA’s are not deductible when you contribute to them but not taxable when you withdraw money from them

If you are eligible for the retirement savers credit form 8880 report your Roth and 401-k contributions there

Answer 2

The 401(k) is deducted BEFORE your income is reported on your W-2. Therefore it is not included in income and can't be deducted.
The Roth IRA is a non-deductible after tax contribution. The benefit is you are NEVER taxed on withdraws after retirement age.
Neither is deducted on your tax return. I believe you must declare the Roth IRA contribution on your return, but it does not affect your taxes.

Answer 3

You can contribute to both, however your contributions to your Roth IRA are not tax deductible. The benefit of the Roth is that it's able to grow tax free, and once you reach 59.5 years of age, you can take all of the money out tax free. The contributions to the 401(k) plan will reduce your taxable wages in the year you contribute.

Answer 4

Neither one is tax deductible. The 401 you will pay taxes when you use it, the roth you have already payed the taxes. Good for you having both of them.

Answer 5

There will be nothing to report on your taxes, other than your W-2 information showing your 401k contribution.

You can also have the Roth as long as your AGI is less than the contribution limit ($110K, or $160K if married filing a joint return).

There will be no additional tax deduction to report on your return.