How should I allocate contributions between regular 401k and Roth 401k?

[xtexan]

When I check the "maximize contribution" box, Turbotax says I can defer a maximum of $24924.  I believe this includes some amount of catch up contribution.  This corresponds to line 14 on TT's "Keogh, SEP and SIMPLE Contribution Worksheet".

However, line 21 of TT's "Keogh, SEP and SIMPLE Contribution Worksheet" says the maximum deductible contribution for MP, PS, SEP & Individual 401k plans is a greater amount, namely, $30,849.

When I tweak the numbers on the retirement contribution screen, I can see that my refund maximizes right at $19,000 deferral with a $3,000 catch up contribution, so there doesn't seem to be any point to contributing the full $30,849.

If I truly have a cap of $30,849, and I only make a $19,000 deferral and $3,000 catch up contribution to the pre-tax 401k, do I still have a remaining $8849 that I could contribute to a Roth 401k?

[dmertz · Accepted solution]

$24,924 is the sum of the maximum $19,000 regular elective deferral and your maximum permissible employer contribution of $5,924.  Your maximum deductible contribution is the lesser of $24,924 plus $6,000 of catch-up elective deferrals, $30,924 or your net earnings from self-employment of $30,849.  In this case, your net earnings are the lesser amount.  (Net earnings equals net profit minus the deductible portion of SE taxes.)

Any amount you choose to contribute to as designated Roth contributions reduces the $19,000 plus $6,000 of elective deferrals you are permitted to make, dollar for dollar.  (If you make a full $25,000 of combined elective deferrals and designated Roth contributions, that reduces your maximum employer contribution to $5,849 so that the total of all contribution does not exceed your net earnings from self-employment.

[xtexan]

Crystal clear, thank you.