tallyho

I received some unexpected cash from the sale of my parent's home. I decided that the best way to invest it was to use the cash to live on, and have 70% of my income diverted directly into my retirement plans:401(k) and 403(b). I have made tax deferred payments of $10,000 into my 401(k) and 403(b) thus far. Do I HAVE to report this amount on the CSS profile ? I can't see where the tax deferred payments show up on my W2 forms OR on my 1040. (How would the financial aid office know about these tax deferred payments if they are not showing up on tax return or W2's??)
If I understand correctly, if I DO report these tax deferred payments to both 401(k) and 403(b), it will be added to my income and count against me in the EFC calculation. So I don't want to report it, unless somehow I have to. Any advice welcome!

hoosiermom

Tax deferred payments to retirement plans show up in box 12 on your W-2. They are reportable.

annoyingdad

Pre-tax payments to retirement accounts are just that, pre-tax so they don't show on the 1040. They should show on the W-2 though. They should be listed along with pre-tax medical and dental premiums you paid, amounts contributed to an FSA etc. on your pay stubs and as stated, in box 12 of the W-2. They count against you as it is considered a choice to contribute to retirement during the college years rather than using the money toward college. In theory you had all the pre-college years and will have all the post-college years to fund your retirement. So yes, they have to be reported. The extra large amount contributed should only count against you for one year. College costs are expected to be paid with a combination of prior income(savings), current income, and future income(loans), not all from current income.

tallyho

Thank you for your help, it's not on my W2 form, but I found it on my paystub.
Helpful to know that it will only count against me this one year.

CTScoutmom

I guarantee it is on you w2, you're just not looking in the right place. the 401(k) goes in box 12, with a "D" to indicate that it's a 401(k). The 403(b) has its own letter code.

I'm assuming your 401(k) and 403(b) are from different employers. The maximum you can contribute to these combined is $17,000 this year. If the money is already there, you need to have some of it withdrawn by April 15th to get you down to $17,000, or you will end up paying tax on the excess both this year, and when you take it out (as well as on the earning attributed to the excess). I would do this as soon as possible.

Nice plan, but you have to be careful when 2 employers are involved, because they don't know to keep you from making excess contributions.

annoyingdad

If you are age 50 or over the limit for 2012 is $22,500 with catch-up contributions.

happymomof1

Check the income limits for an IRA. If you (and a spouse if you have one) fall within those limits, you can send some of your money to an IRA (or to both IRAs as the case may be). With an IRA you would have the option of a Roth, which has different tax advantages than a conventional IRA.