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Deductions & credits
If you use the maximize contribution check box for you 401k in Turbo Tax, it doesn't take into account your health insurance deduction. Why it doesn't, I have no idea. You can't take total deductions that exceeds your net profit. If you take the 16k insurance deduction, that leaves only 4k for the traditional 401k contribution. It is better to take the insurance deduction than contribute the 16k to the traditional 401k because eventually you will have to pay taxes on withdrawals from the 401k whereas you will never have to pay taxes on the 16k insurance deduction.
Hopefully no corrections are required on this post, but thanks to Dmertz for the correction on my last post.
‎February 18, 2024
11:17 AM
815 Views