For myself (I'm tagging onto this string), I'm a sole proprietor and file jointly with my husband. I don't issue myself a W-2.
Here's an example.
The max an individual under 50 can contribute is $19,500. Let's say my company's net income (which ends up being my compensation) is only $15,000, so I as an employee "defer" $15,000 by cutting a check and depositing it into my solo 401(k) account. As the employer, I can also make an employer contribution of $3,000 (20%) - I send a check to my account, designating it as an employer contribution.
Now in TurboTax Home & Business, I enter the $15,000 under "Employee Deferral" and, supposedly, the $3,000 in the "Employer Contribution" box. The problem is that after entering this info, I expect to see $18,000 in line 15 of the 1040's Schedule 1, but I only see $15,000. TurboTax doesn't seem to realize it needs to add the 2 numbers together for those of us who are have solo (single-participant) 401(k)s who are both employee and employer. According to the instructions*, for people like us, the employer contribution does not go on Schedule C, but is combined with the employee Deferral amount. I can't "bypass" this by entering $18,000 into the employee Deferral box since it knows my income was only $15,000 and won't allow me to deduct more (if it thinks that's what I actually deferred as an employee/individual).
* From Instructions for Line 19 of Schedule C:
"Enter your deduction for the contributions you made for the benefit of your employees to a pension, profit-sharing, or annuity plan (including SEP, SIMPLE, and SARSEP plans described in Pub. 560). If the plan included you as a self-employed person, enter the contributions made as an employer on your behalf on Schedule 1 (Form 1040), line 15, not on Schedule C."
How can I enter the $3,000 so it shows up properly on my Schedule 1, and therefore reduces my taxable income by $3,000?
Thanks!
