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Level 2

Retirement Plan Contribution confusion?

My wife gets a W2 from employer and a small 1099-Misc income from others. She contributes max to her employer 401k. Turbo Tax maximizes SEP contribution on her 1099 income and she contributes that. This year it is confusing - it is showing zero under SEP, but total qualified contribution that exceeds her 401k contribution. Does that mean she can contribute zero to SEP or calculate difference between total less what she put into 401k to put into SEP? Surprised that Turbo Tax is not pulling her 401k contribution from the W2 and showing zero instead? PS: Does employer match count also? That is reported nowhere.
2 Replies
Level 15

Retirement Plan Contribution confusion?

Her SEP contribution is entirely independent of the 401(k) contributions.  One does not affect the other.


Her SEP contribution is limited to 20% of net earnings from self-employment.  Net earnings are net profit minus the deductible portion of self-employment taxes.  Marking the Maximize box for a SEP contribution will cause TurboTax to automatically calculate this.  Make sure that there was no experimentation with individual 401(k) entries.  If the result on Schedule 1 line 16 is not the correct SEP contribution, try deleting the Keogh, SEP and SIMPLE Contribution Worksheet and revisiting the self-employed retirement section to re-mark the Maximize box for a SEP plan.


Make sure that the only entries made related to the 401(k) are the entries in box 12 of TurboTax's W-2 form, code D for elective deferrals, code AA for Roth contributions.  Enter these nowhere else.

Level 2

Retirement Plan Contribution confusion?

My bad. The Individual 401k box was inadvertently checked along with SEP - the 401k is through employer on W2; and only SEP applies and gives the correct answer.

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