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CA77
New Member

Is solo 401(k) limit calculation not accurate when you are solo s-corp and using self-employed version of Turbotax?

I have LLC which is regarded S-corp for tax. We made a mistake and selected self-employed version of Turbotax and it's too cumbersome to downgrade.
I made elective deferral contribution to solo 401(k) less than 18,500 limit and also the made profit sharing contribution as an employer for 25% of W-2 wage. So the total is below the total max limit. But, the turbotax calculate (when I check maximize contribution) that I have 10,000 overcontribution. Is it because turbotax is assuming I'm self-employed, not corporation / w-2 employee?? Or am I missing something?
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dmertz
Level 15

Is solo 401(k) limit calculation not accurate when you are solo s-corp and using self-employed version of Turbotax?

You should not be making any self-employed retirement entries.  Except with respect to a self-employed health insurance deduction, you are not self-employed.  You are an employee of the S corp.  The 401(k) plan must be established under the S corp, the contributions to the plan deposited by your S corp, and the deduction for the contributions is taken on the S corp's tax return, not on your personal tax return.

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2 Replies
dmertz
Level 15

Is solo 401(k) limit calculation not accurate when you are solo s-corp and using self-employed version of Turbotax?

You should not be making any self-employed retirement entries.  Except with respect to a self-employed health insurance deduction, you are not self-employed.  You are an employee of the S corp.  The 401(k) plan must be established under the S corp, the contributions to the plan deposited by your S corp, and the deduction for the contributions is taken on the S corp's tax return, not on your personal tax return.

CA77
New Member

Is solo 401(k) limit calculation not accurate when you are solo s-corp and using self-employed version of Turbotax?

I was worried about where to report the employer contribution, but I guess that's taken care of on 1120s. Makes sense. Thank you!
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