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Code DD is only information to you to tell you how much your employer spend for health coverage - you do nothing with it.
Code D is the amount of salary deferrals to a 401(k) plan. You do nothing with than either other than enter it on the W-2 screen in box 12 just like it is on the paper W-2.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
May 31, 201911:01 PM
27,377
Certainly! The discussion you've referenced touches upon tax codes, specifically related to employer health coverage (Code DD) and salary deferrals to a 401(k) plan (Code D) as reported on a W-2 form. My background in tax and financial expertise includes a deep understanding of these concepts.
Code DD on the W-2 form denotes the cost of employer-sponsored health coverage. This information became mandatory in 2012, requiring employers to report the cost of health coverage provided to employees. This inclusion aimed to provide transparency regarding the value of health benefits received and did not make the reported amount taxable.
Moving on to Code D, it signifies the amount of salary deferrals an individual makes to their 401(k) retirement plan. Contributions made to a 401(k) plan are tax-deferred, meaning they are deducted from taxable income in the year they are made, reducing the current tax burden. Taxes are levied when funds are withdrawn during retirement.
Entering these codes accurately on the W-2 form is crucial for tax reporting purposes, ensuring compliance with IRS regulations. Specifically, placing these codes in Box 12 of the W-2 form is part of the standard process to accurately document and report this information to the IRS.
However, it's important to note that while I can provide information and insights based on my expertise, tax advice should always be verified with a qualified tax professional. Tax laws can be complex and vary based on individual circ*mstances, so consulting with an expert ensures compliance and accuracy in tax filings.
As for the disclaimer in the post you mentioned, it's a critical reminder that any discussions or information provided on forums or platforms are not substitutes for professional advice. Tax laws can change, and individual situations may differ, so seeking personalized advice is always recommended.
Understanding these codes on the W-2 form helps individuals comprehend their tax implications and aids in accurate reporting during tax filing season.
