I have a profit sharing Keogh account. On some websites, I've seen the following formula for calulating sole proprietorship retirement accounts: 25*(Earned Income = Net Profit – 1/2 of Self-Employment Tax – Contribution).
When Turbotax calculates my maximum deduction, it uses .20 , and doesn't subtract my Contribution Amount. The formula above produces a smaller contribution than Turboxtax. Should I be using Turbotax's method?
Thanks,
