If you have a self-employed retirement plan, such as a SIMPLE IRA, you'll need to upgrade to TurboTax Self-Employed. TurboTax Premier Edition does not support this tax situation.
To enter your SIMPLE IRA contributions in TurboTax Self-Employed:
- Open (continue) your return in TurboTax Online. (If your return isn't open, you'll need to sign in and click Take me to my return. Make sure you are in the Federal and not the State section.)
- Click the drop-down arrow next to Tax Tools (lower left of your screen).
- Select Tools.
- In the pop-up window, select Topic Search.
- In the I'm looking for: box, type simple ira.
- In the results box, highlight simple ira contributions, then click GO.
- You'll land on the Self-Employed Retirement Plans page, where TurboTax asks if you contributed to a 401(k) plan. Answer Yes or No as appropriate for your situation. (Note: If you also work as an employee, it is possible that you have an employer-sponsored retirement plan through that job. This other retirement plan must be taken into account, which is why you are asked about it here.)
- When you get to the Keogh, SEP, and SIMPLE Contributions screen, click Yes.
- When you reach the Your Contributionsscreen, you'll be able to enter your SIMPLE IRA contributions. (Click the first screenshot below to enlarge it for reference.) Caution: Your contribution must not exceed your net self-employment income, and TurboTax cannot figure your maximum contribution for you. Click the Learn More link on this screen for more information about the SIMPLE IRA contribution limitations.
- After you enter the contribution, follow the onscreen instructions in this section to completion.
TurboTax automatically carries the deductible amount of your SIMPLE IRA contribution to Line 28 of your Form 1040. It is an adjustment to income, meaning the allowable amount is subtracted from your total income to arrive at your adjusted gross income (AGI). You can see this for yourself by previewing the Form 1040 and scrolling down to Line 28.
- Click the drop-down arrow next to Tax Tools (lower left of your screen).
- Select Tools.
- In the pop-up window under Other Helpful links… select View Tax Summary.
- In the black menu box at the left of your screen, click Preview my 1040.
- After the Federal 1040 opens, scroll down to line 28 to see the entry for Self-employed SEP, SIMPLE, and qualified plans. (Click the second screenshot below to enlarge it for reference.)
- Your total income is on Line 22 and your AGI is on Line 37, so you can scroll back and forth to verify that the SIMPLE IRA contribution was subtracted to adjust your income.
For more information, please click this IRS link: SIMPLE IRA Tips for the Sole Proprietor
By: TurboTaxLindaA
