Thanks again for your responses.
@dmertz wrote:
"I deferred $10,000 to my Individual 401k, and $13,000 to another 401k I had through an employer."
Then you should be entering $10,000, not $23,000, as your elective deferrals to the individual 401(k). I'm not sure I understand what the point of entering $23,000 was since you know that you are permitted an elective deferral of only $10,000.
I tried this because it was suggested by a previous poster.
"Its algorithm for maximizing contributions for Individual 401ks does not seem to be correctly accounting for additional deferrals that were made to another 401k."
As previously mentioned, TurboTax has not been programmed to do that and is one of the documented limitations of TurboTax.
I don't think this is documented well enough, if at all. TurboTax offered the maximize option even though it knew I had made 401k contributions to a different plan. It never warned me that the maximization it suggested would be wrong. If I hadn't been familiar with the tax publication and worksheet myself, I would have ended up following its instructions and over-contributing to my plan.
"You can't just add those other contributions into Part III, line 9,"
That's not what is happening. Line 9 of TurboTax's worksheet does not serve the same purpose as line 9 of the worksheet from IRS Pub 560. Line 9 of TurboTax's worksheet is the statutory maximum needed to support the calculation provided by TurboTax's Maximize function. It is not for the the amount that you actually contributed. When you have made elective deferrals to a different plan, you cannot use the TurboTax's Maximize function for a 401(k) contribution.
Right, but the product gives no warning about this and will confidently give you the wrong answer.
Unlike the TurboTax worksheet, the IRS worksheet is not used to calculate the maximum permissible contribution, which is a different use for line 9.
Perhaps what you are asking for is that TurboTax take into account elective deferrals or employee Roth contributions reported on Forms W-2 by subtracting them to produce the amount to use on line 9 of TurboTax's worksheet. I agree that that could be a reasonable thing to do to expand the use of the Maximize function to those who make elective deferrals or employee Roth contributions to other plans, but I've seen no evidence that Intuit has any intention to do that. They seem to have more trouble than they can handle just making the changes to TurboTax that are required keep up with changes in the tax code.
This would be ideal, but I would settle for the software not offering to do something it is unable to do correctly and then giving the wrong answer.
