Thank you for your response. However it is inconsistent with the information on the IRS website publication 560.
The Solo 401 k Employee and Employer contributions have no bearing on IRA contributions; other than that they (Solo 401k contributions) may reduce your Schedule C income. And that is irrelevant to my question.
My question is why the EmployER Contributions I make for myself; when entered in Turbo Tax Home and Business; do not reduce my tax liability? Specifically the counter in the top of the program that shows my tax liability. As happens when I enter the EmployEE Portion?
You are permitted to contribute both as an EmployEE and an EmployER to a Solo 401k. ( I have NO employees- hence Solo K)
And why the heck would I buy Turbo Tax if I knew how to do and enter the calculation?? That's what people overpay TT for-to do the calculation. It's absolutely ridiculous to think that a TT buyer could follow what you have written here. What you write here implies that I cannot follow the step by step method and have the calculation be accurate. Nor are your instructions specific enough to follow using "forms".
Here is direct quote from the IRS website:
The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both: 1. Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit:
Will Turbo tax be fixing this calculation? So the program calculates things correctly?
