DanaB27
Expert Alumni

Deductions & credits

No, if you have enough taxable compensation from your self-employment then you can contribute the $6,000 to an IRA in addition to the solo 401k contribution. Contributions to a 401k and contributions to an IRA are two different things. Each has its own contribution limits.

 

For 2021 the total contributions you make each year to all of your traditional IRAs and Roth IRAs can't be more than:

  • $6,000 ($7,000 if you're age 50 or older), or
  • If less, your taxable compensation for the year (IRS)

Since you are self-employed your taxable compensation is your net profit reduced by the deduction allowed for one-half of your self-employment taxes and Self-employed SEP, SIMPLE, and qualified plans (Line 3 of Schedule 1 minus line 15 and 16 of Schedule 1).

 

To preview Form 1040 and Schedule 1:

  1. Click on "Tax Tools" in the left menu
  2. Click "Tools"
  3. Click "View Tax Summary" in the Tool Center window
  4. Click on "Preview my 1040" on the left

 

[Edited 2/16/2022 | 9:00am PST]

@mrtk31 

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