turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
turbotax icon
cancel
Showing results for 
Search instead for 
Did you mean: 
Announcements
Close icon
Do you have a TurboTax Online account?

We'll help you get started or pick up where you left off.

ericball
New Member

I established a Solo 401k contributing $66k. When I enter in turbotax, it gives an error saying 'elective deferral to an individual 401k cant exceed $22.5k'. How do I fix

 
x
Do you have an Intuit account?

Do you have an Intuit account?

You'll need to sign in or create an account to connect with an expert.

1 Best answer

Accepted Solutions
dmertz
Level 15

I established a Solo 401k contributing $66k. When I enter in turbotax, it gives an error saying 'elective deferral to an individual 401k cant exceed $22.5k'. How do I fix

I assume that you are under age 50 and are therefore not eligible for a $7,500 catch-up contribution.  Instead of entering the specific $66,000 amount of your contribution, just mark the Maximize box for your solo 401(k) contribution.  TurboTax will then calculate the maximum permissible deductible elective deferral and maximum permissible employer contribution.

 

The elective deferral is an employee contribution.  The maximum regular elective deferral for 2023 is $22,500.  You are permitted a maximum employer contribution of up to $43,500.  To be able to realize these maximums for a total of elective deferrals and employer contributions combined of $66,000 you must have at least $230,520 of net profit from self-employment assuming that you have no other income subject to Social Security tax.  If you don't max out the $66,000 overall contribution limit the elective deferrals and employer contributions and your solo 401(k) plan permits, you can make after-tax contributions to the solo 401(k) that are not reportable on your tax return, but you would need at least $71,018 of net profit to be able to make the combine total of elective deferral, employer contribution and after-tax contribution of $66,000.

View solution in original post

2 Replies

I established a Solo 401k contributing $66k. When I enter in turbotax, it gives an error saying 'elective deferral to an individual 401k cant exceed $22.5k'. How do I fix

I'll page @dmertz 

dmertz
Level 15

I established a Solo 401k contributing $66k. When I enter in turbotax, it gives an error saying 'elective deferral to an individual 401k cant exceed $22.5k'. How do I fix

I assume that you are under age 50 and are therefore not eligible for a $7,500 catch-up contribution.  Instead of entering the specific $66,000 amount of your contribution, just mark the Maximize box for your solo 401(k) contribution.  TurboTax will then calculate the maximum permissible deductible elective deferral and maximum permissible employer contribution.

 

The elective deferral is an employee contribution.  The maximum regular elective deferral for 2023 is $22,500.  You are permitted a maximum employer contribution of up to $43,500.  To be able to realize these maximums for a total of elective deferrals and employer contributions combined of $66,000 you must have at least $230,520 of net profit from self-employment assuming that you have no other income subject to Social Security tax.  If you don't max out the $66,000 overall contribution limit the elective deferrals and employer contributions and your solo 401(k) plan permits, you can make after-tax contributions to the solo 401(k) that are not reportable on your tax return, but you would need at least $71,018 of net profit to be able to make the combine total of elective deferral, employer contribution and after-tax contribution of $66,000.

message box icon

Get more help

Ask questions and learn more about your taxes and finances.

Post your Question
Manage cookies