If you want to maximize your solo 401(k) contributions you must make the maximum regular elective deferral for 2022 of $20,500 and the maximum catch-up of $6,500. Your maximum employer contribution is 20% (not 25%; 25% is the base rate that must be adjusted because your employer contribution reduces the amount to which the 25% factor would otherwise be applied) of net earnings. Net earnings are net profit minus the deductible portion of self-employment taxes.
To have TurboTax calculate the maximum permissible contribution, simply mark the Maximize box and leave the dollar-amount boxes blank.
TurboTax will not flag excess employer contributions. It will simply limit your deduction to the permissible amount. If you contribute more than the permissible amount you will have a 10% excess contribution penalty on Form 5330. TurboTax does not support Form 5330.
With $78,451 of net profit, maximizing your solo 401(k) contributions will mean making a maximum regular elective deferral of $20,500, a maximum catch-up contribution of $6,500 and a maximum employer contribution of $14,582 for a total of $41,582.
