The example the IRA makes in their website for Ben Ben deducts 19,500 before paying taxes. Why does he get to deduct 19,500 but my wife not?
Example: Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2020. He deferred $19,500 in regular elective deferrals plus $6,500 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2020 were $38,500. This is the maximum that can be contributed to the plan for Ben for 2019.
One Participant 401k Plans | Internal Revenue Service (irs.gov)
