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Get your taxes done using TurboTax
Looking at the worksheet you provided a link to, I'm thinking that Part III Step 5 is the maximum employer contribution, which is arrived at by multiplying net earnings by .20. That is added to the maximum employee contribution, which is a flat $30,500 (with catch up). However, I want to deduct my health insurance premiums, as you recommended prioritizing those over the 401k contribution, since I'll never have to pay taxes on insurance deduction. I'm thinking that to maximize my 401k contribution, I need to subtract the insurance from my net earnings, NOT from the maximum amount arrived at on the worksheet, which is smaller. Is that correct? Next year, my insurance premiums will be negligible, so I'm thinking that as long as my premiums are smaller than the difference between net earnings and the maximum 401k contribution as determined on the worksheet, I can simply use the checkbox "maximize 401k contribution" on Turbo Tax and that will finally give me the correct maximum amount without messing with anything else. I'm hoping I finally understand this. Do I get a thumbs up or down? Thanks