How does 401K contributions affect tax returns?

The contribution to the 401(k) is only reported on the W-2 in box 12 with a code of D.  It is not reported anywhere else on a tax return.

Yes it is reducing your income so you get taxed on a lower amount.   It comes out of your checks pretax and has already been deducted from the wages in box 1 and you can't deduct it again.  Notice that box 1 should be less than boxes 3&5.

If you entered the information about your 401k when you entered your W-2, that is all you have to do with that.  You do not enter it anywhere else.   At certain income levels, the 401k contribution might help you get the retirement saver credit.

Go to Federal>Deductions and Credits>Retirement and Investments>Retirement Savings Contribution Credit