dmertz
Level 15

Retirement tax questions

$9,620 sounds like just the limit on employer contributions and does not include the $19,000 of elective deferral.  In TurboTax, make sure that you are using the Maximize function for an individual 401(k) contribution, not the Maximize function for a SEP-IRA contribution.  SEP plans only permit employer contributions while individual 401(k) plans permit both the employer contribution and employee contributions.

 

Also, the maximum employer contribution for someone who is self employed is 20% of net earnings.  Net earnings are net profit minus the deductible portion of self-employment taxes.

 

TurboTax implements these calculations properly.