401K self employed contributions

Forum|Forum|3 years ago
April 10, 2023
1 reply
0 views

I already contributed X amount during 2022, and was planning to contribute an extra "Y" amount.

I'm trying to fill the info in Turbo Tax to simulate how my federal tax due changes with different amounts of additional contributions. But no matter what I do, the federal tax due remains exactly the same! How? Am I already over the maximum contribution and that's why no additional contribution will reduce the tax due?

The weird thing is that I also tried reducing the contribution (removed the employer match (profit sharing) and again nothing changes! still the very same tax due. What's going on??

I completely reset everything by removing the form (tools => delete a form => Keogh/SEP/SIMPLE Contribution Worksheet), so I'm sure I'm starting clean every time.

AmyC

Level 15

If your only tax liability is the self-employment tax, then any contribution changes will not affect your tax due. Take a look at your 1040. Contributions reduce the taxable income. Does line 16 have any tax? Line 17 is your self-employment tax.

To see your forms:

In desktop, switch to Forms Mode.
For online, see How do I preview my TurboTax Online return before filing?

**Say "Thanks" by clicking the thumb icon in a post. **Mark the post that answers your question by clicking on "Mark as Best Answer"

artrillaAuthor

Level 2

Yes, line 16 has a bunch of tax already (filing jointly)

Line 17 is currently empty.

artrillaAuthor

Level 2

Now I think I know what's going on.

When I click on "Maximize Contribution to Individual 401(k)", it is already assuming I will contribute the maximum, but it doesn't really say anywhere the difference vs. what I already contributed.

on form 1040, Part II, Adjustments to income, line 16Self-employed SEP, SIMPLE, and qualified plans, it shows "X" more than what I actually contributed so far. So I'm guessing I should contribute X - actual contribution?

Is Turbo tax considering the income to estimate that maximum? (As there are some rules around that)