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nohustle1

Deferred Salary Contributions

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Correct. If you contribute $15,000 to your 403(b) plan and $15,000 to your 457 plan, the $30,000 will not be included as income on your tax form 1040 line 7. The amount to enter on line 7 should be shown in box 1 of your w-2. Box 1 of your w-2 will not include elective deferrals such as contributions to a 403(b) or 457(b) plan.

 

If you participate in both plans, you can defer up to $16,500 under each plan ($33,000) in 2010. If you over age 50, you can also make a catch-up contribution of $5,500 to the 403(b) and if your employer is governmental, an additional $5,500 to the 457(b).

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Meaning it's already deducted from your income when you get your W-2, so you don't reduce your income again when you do your 1040. If you try that, it's likely that you'll get a letter from the IRS.

 

This assumes the deferral into the 403(b) was pre-tax, not Roth. Roth is not deducted and is not deductible.

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