Employer match is zero because as a sole proprietor, you are not matching your contributions. The employer match is for common-law employees. The employer match for employees, is a deductible business expense on Sch C. It is not deductible for the owner since the owner must put taxed income into the ROTH.
Both sections are actually agreeing. The top section shows your employee contribution and the total contribution.
The bottom section shows your employer contribution and the total.
Maybe this will help with understanding and next steps. You need to do the 1099-R next for $12,662.
Pre- tax dollars vs after tax dollars and how the income flows.
- Pre-tax traditional 401k: The employer contribution to the retirement plan is subtracted on Sch 1 under self-employed qualified plans. The employee contribution is reported on the same line 16 on Sch 1. Taxed as income later - when withdrawn.
- After tax ROTH 401k: The income must be taxed before it can be contributed. No deduction taken on Sch 1 so income is taxed and available funds to contribute to ROTH 401k. 1099-R is used to report the employer contribution to retirement plan, It is not taxed since rollover code G is used. You are taxed once on the income.
ROTH 401K
To file the 1099-R (boxes not mentioned are left blank):
- Box 1 Enter total employer contribution
- Box 2a enter same as box 1
- Box 5 is blank
- Box 7 code G
- Not an IRA/SEP/SIMPLE -solo 401K is a qualified plan, not an IRA for this purpose.
Your employee contributions are not reported on your tax return since they are after tax dollars.
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