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Can I contribute the full $18K in elective deferrals to a solo 401K if I already made voluntary contributions to a company-sponsored SIMPLE IRA plan this year ($9K)?
I was working for a small company from Jan-Aug of this year and started freelancing in August and would like to maximize my pre-tax retirement contributions.
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Retirement tax questions
No. Your elective deferrals (and Roth contributions) to the solo 401(k) and the SIMPLE plan combined are not permitted to exceed $18,000 for someone under age 50. (The maximum permitted to the SIMPLE plan by itself is $12,500). Contributing $9,000 in elective deferrals to the SIMPLE plan for 2017 allows you to defer a maximum of $9,000 to the solo 401(k).
Note that TurboTax's Maximize function for individual 401(k) contributions is unable to accommodate elective deferrals to multiple plans. You'll have to calculate and enter the maximum permissible elective deferral or Roth contribution to the solo 401(k) yourself. You can then use the Maximize function for a Profit Sharing Keogh or SEP contribution to calculate the maximum permissible employer contribution to the solo 401(k).
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Retirement tax questions
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Retirement tax questions
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