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Actually your pretax 401K contributions do not appear on your 1040 either. They are deducted from your gross pay when reported on your W-2 form. Hence you reduce your reportable taxable gross income for tax purposes. However, your total income including the contributions gets reported in another box so your true gross pay continues to be used in various benefits and Social Security calculations.

Isn't all the paperwork wonderful. Fortunately, it all comes out in the wash--most of the time.
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