Can I contribute greater than my earned income to a Solo Roth 401(k) and a Roth IRA? TurboTax does *not* flag this as an excess Roth IRA contribution.

[Mickey T-maker]

If I max out my Traditional Solo 401(k), TurboTax says I can't contribute to a Roth IRA as well since it exceeds my earned income. But it *will* let me exceed my earned income if I contribute to my Roth Solo 401(k) and Roth IRA.

[dmertz · Accepted solution]

This is correct behavior.  The same portion of net earnings can support both a Roth 401(k) contribution and a Roth IRA contribution because only deductible contributions to your solo 401(k) reduce the amount of income that you can apply to an IRA contribution, per the tax code.  A Roth contribution to your solo 401(k) is not deductible.

[dmertz]

Note, however, that your election to make an elective deferral or Roth contribution to your solo 401(k) was required to have been made by December 31, so it's technically too late to change your mind about which of these you chose to do.

[Mickey T-maker]

Thanks for your first answer, as to the fact that this was indeed possible. But making an election for a deferral by year end was something I was unaware of. Both my Solo 401(k) and Roth Solo 401(k) are at Vanguard and when I login, I see I can make a 2020 contribution--but I can't see a place to specify whether it goes to pre-tax or Roth. I presume being able to direct it is what you are referring to about an election by year end. I've had the Solo 401(k) for a while, but last year was the first year with the Roth 401(k), which is what I contributed to in 2019.