Here's what Turbotax 2022 says in its help menu. I have underlined the part that is confusing me, that implies if one earns more than $129K from their sole proprietorship, they can't contribute to their solo traditional 401k at all.
Nondeductible IRA Contributions
If you (or your spouse) are covered by a retirement plan at work, and your modified adjusted gross income (AGI) is above a certain amount, then you can't deduct part or all of your contribution.
Modified adjusted gross income limits
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You can't deduct any of your contribution if your modified AGI is:
- $129,000 or more, and you're married filing jointly or a qualifying surviving spouse
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How can I tell if I'm covered by a retirement plan at work?
Look at box 13 on your W-2. You're considered to be covered if the Retirement Plan box is checked.
You are also considered to be covered if you are self-employed and have contributed to a SEP, SIMPLE, Keogh, or individual 401(k) plan.
