I use TT Deluxe. On the screen entitled "Retirement Contribution Allocation", it asks to "Enter the amount of your $21,311 Keogh, SEP, SIMPLE or 401(K) plan contribution deduction attributable to Consultation," where $21,311 is my net business income minus deductible self-employment tax , and "Consultation" is my business. My self-employed health insurance deduction amount is $18,606, although I am not sure whether this piece of information would be relevant to my question below.
Please help me understand ... what does the amount I enter in this question actually mean practically? Is it that I could contribute only that amount to my individual 401(k) plan? Or, does it mean I could contribute $21,311 regardless of what amount I enter into the box?
I tried different answers. The federal tax due is the smallest when I answered with any amount between $0 and $365 in the box. Choosing any amount above $365 increased the federal tax due; and the larger amount the greater the tax.
Thank you in advance for your help.
