DaveF1006
Expert Alumni

Deductions & credits

Since you treat yourself as an employee, your contribution  limit is $22,500 in 2023 or if you are 50 or over, the amount is $30,000. In addition, your business may make a match up to 25% of your compensation for the year to your plan.  This would be 25% of $70,000. Compensation is defined as gross income according to IRS definitions.

 

Now let's determine what your maximum contribution limit is for 2023.

 

  1.  If you are 50 or under, you limit is $22,500 plus 25% of $70,000 or $17,500. In this case, your total contribution limit is $40,000. ($22,500 + $17,500).
  2. At 50 or older, add the catchup contribution of $7500 thus the limit is $47,500. 

Turbo Tax will calculate what the total contribution amount  should be and will warn you of the fact that an excess contribution has been made.

 

Contribution Limits to a one Participant 401K Plan

 

@vikalp77 

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