How do I deduct my 2018 401k contribution paid after December 31st 2018 ? We did not make any pre-tax deductions to our 401k during 2018.

[mpotter1971]

My wife and I own an S-corp and, in 2018, we paid ourselves W2 income of $12,000 each (we have no employees).  We will generate K1's to pass through the net profits to our personal return (married filing jointly).  We would like to make our 401k contributions of $12,000 each prior to the April 15th deadline.  However, I'm not seeing how these payments will be properly deducted from our income on our returns.  I've experimented with entering these deductions in TurboTax Deluxe 2018 (First @ Federal Taxes > Retirements and Investment > Retirement Savings Contribution Credit and Second @ Federal Taxes > Wages & Income > Business Items > Business Deductions and Credits >  Self Employed Retirement Plans) and none of the entries seem to be appropriately reducing our income / tax liability.  How do we enter the $24,000 combined contributions in TurboTax such that they effectively reduce our income?

Please let me know as soon as possible.   Thank you!

Marc

[dmertz · Accepted solution]

Except for the purpose of a self-employed retirement contribution, you are not self-employed, you are employees of the S corp.  The deduction for the retirement contributions goes on your S corp tax return, not on your personal tax return.  The amount of your elective deferrals must be reported with code D in box 12 of the W-2s issued by the S corp.

The amount of your income that you can defer to the 401(k) is what remains of your W-2 box 1 income after subtracting any required income tax withholding, Social Security tax withholding and Medicare tax withholding.

[mpotter1971]

Thank you.  That explains it.  So, since our payroll service has already issued the W2's for the 2018 tax year, I assume we would need to have them file revised / corrected W2's after we have made the 401k contributions.    

[dmertz]

Your election to make an elective deferral was required to have been made by December 31, 2018.  You are not permitted to make that election after-the-fact.  If you made a timely election and your S corp makes the deposit, yes, you would need to get your payroll service to correct the W-2s.