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Posted by removeps-groups@yahoo.com on June 2, 2008, 4:06 pm
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> When I contribute to 401K, will the part of the income I put into my
> 401K be reported as taxable income in my W2 and contribute to my
> adjusted gross income? I think the answer is no, am I right?
Correct. 401k contributions reduce your AGI. Be aware that your
gross income before 401K deductions is still subject to social
security and medicare.
> The reason I am asking this question is to determine if I can increase
> my 401K to help me qualify for the hope tuition credit.
Yes, that's a good strategy. You can increase your 401K contributions
for other reasons as well, such as qualifying for the stimulus checks.
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