"can I:
1. Deduct the $16K insurance premium (Turbotax puts on Schedule 1 Line 17)?
2. Also contribute $16K to my spouse's 401k with a "new" Roth designation (Turbotax puts on Schedule 1 Line 16)?
3. Also contribute the remaining $4K to her individual 401k or some other traditional account?"
1. $16k can be deducted on Schedule 1 line 17 if the insurance is in your spouse's name or the name of your spouse's company and the sum of this $16k and the Premium Tax Credits do not exceed the cost of the insurance.
2. $16k can also be contributed to the designated Roth account in your spouse's 401(k) plan, assuming that plan provides a designated Roth account. A designated Roth contribution is not deductible, so this contribution is not included anywhere on the filed tax return. It is included on TurboTax Keogh, SEP and SIMPLE Contribution Worksheet used to determine the maximum total contributions to the traditional and Roth accounts in the individual 401(k).
3. The $4k that remains of the $20k net earnings after making the designated Roth contribution can be deferred to the traditional account in the 401k and deducted on Schedule 1 line 16.
4. The $16k contributed to the designated Roth account will also support contributions to traditional or Roth IRAs for both you and your spouse.
