OP here.
I still find this confusing.
The options seem to be:
1) Enter the employer contribution (the LLC owned by my wife and I) in box 13 with the letter R. When asked by TurboTax what this was I listed it as an employer matching contribution even though I never made the corresponding contribution. The matching worksheet which has a better description of what to enter indicates this is correct.
Enter for elective deferral made by me out of the income listed in box 14 and which came from my personal bank accounts, on my personal return during the business part of step by step.
Then TurboTax is happy, the federal return is accurate but not sure the Schedule k-1 is.
2) Enter both in box 13. The employer part is listed as employer matching contribution and the employee deferral (including catch up) is listed as a solo 401K contribution.
Result, Turbotax shows error because the deferred part is greater than 19,400 due to catch up contribution. The worksheet says not to include the catch up but that is what TurboTax does. This probably can be fixed manually using the worksheet using overrides but could prevent electronic filing.
In the past I used option 1 which yields the correct personal return. Not sure if Schedule K-1 is correct. Not sure it matters as long as the full amount of taxes owed is correct.
