@smcelm , you've made several mistakes that have resulted in excess contributions. First, if these businesses have common ownership, say, because they are both wholly owned by you, they are considered to be a controlled group and despite the fact that they are operated independently must be treated as a single employer for the purpose of a retirement plan. Second, the maximum combined employer and employee contributions to the 401(k) and SEP plans combined is $69,000 plus $7,500 of catchup.
Considering these limitations, $69,000 + $7,500 + $130,000 = $206,500, exactly as TurboTax has determined.
You'll need to obtain returns of the excess contributions, otherwise the $35,000 of excess contributions will be subject to a 10% excess contribution penalty on Form 5330 (not supported by TurboTax) each year that the excess remains.
