I have k-1 income and 401(k) contributions above the box 13 code R limit. How do I get the full deduction on line 28 of the 1040?

[ewoconnor]

My partnership made the max $41,250 profit sharing contribution to my 401k. I added $13,750. TurboTax won’t let me add the $13,750 to box 13 because the $55k total exceeds the Code R limit. How do I get the full $55k to appear in line 28 of the 1040? 

The voluntary contribution is noted in Box 20 with an AH code for “additional information” and an instruction to add to the amount in Box 13, Code R for Line 28 of the 1040. Turbo Tax won’t let me manually edit line 28. 

[dmertz]

TurboTax requires that the $55,000 total from the code R entry be divided into the elective deferral and atchin/profit sharing portions.  After making the code R entry in step-by-step mode, TurboTax will ask you to Enter Code R Detail.  Enter $13,750 as Payments to 401(k)  (non-Roth) and $41,250 as Employer Matching Contribution to 401(k).

Note that to be eligible for a $41,250 profit sharing contribution you must have at least $217,116 shown with code A in box 14 of the K-1 as net earnings from self-employment. 

[ewoconnor]

Thanks! I tried that, but it flags the $13,750 as an error during the pre-file check. It won’t allow the total code r to exceed $41,250. The box 14 income threshold has been met. I can’t efile without resolving  the error - maybe I just need to file by mail?

[dmertz]

Wait, are you trying to add elective deferrals not made though the partnership?
Is the code R amount is only $41,250?
Elective deferrals need to be made through the 401(k) plan administrator, so they should be included in the code R amount.

[ewoconnor]

Yes, so there is $41,250 that is a profit share contribution and a $13,750 elective deferral. TurboTax seems to have a $41,250 limit on code R amounts.

[dmertz]

If the answer is yes to both questions, you need to talk to your 401(k) administrator and the preparer of the Schedule K-1 if you want to be able to make this elective deferral.

Note that the election to make the elective deferral for 2018 was required to have been made by December 31, 2018, so it odd that the elective deferral is not reflected in the code R amount if things were done properly.

[ewoconnor]

The election was made in January ‘18, so no issue there. I’ll ask the preparer about it. But Even if I type in $55k for the code R amount, TurboTax disallows it as being above the $41,250 employer contribution cap.

[dmertz]

Is the code A amount in box 14 of the K-1 $217,116 or more?
If the amount with code A is only about $122,400 (or $90,115 if you were over age 50 in 2018), the $41,250 reported with code R includes your maximum $18,500 of elective deferral (plus $6,000 of catch-up if over age 50).

[ewoconnor]

The box 14 code A amount is over $217k and above the $275k cap. The $41,250 is a 15% profit share of the $275k. The total contribution was $55k.

[dmertz]

I'm still not sure if the code R amount in box 13 is $41,250 or $55,000.  Please clarify that.

[ewoconnor]

Okay. Yes you were right the k-1 preparer should have put the $13,750 in box 13 instead of as an “other” in box 20. Once I put it in using the easy guide, it all flowed through. Thanks for your help and patience!!

[dmertz]

Contact the preparer of the K-1 to obtain a correction.