I have a W-2 and 1099.
I maxxed out my 401k employee contribution via my W2 job. In this case, I am only able to contribute the employER contribution to my solo 401k. However, when I enter the calculated employer comtribution, my tax burden does not change. Shouldn't this contribution reduce my taxable income? Wouldnt this considered a business expense? is turbo tax faulty? Should I just enter this under business expense since that is what it is? Please help.
If you have already contributed $23,000 ate your W-2 employer, you can't use the Maximize function for an individual 401(k) because TurboTax does not support this situation. To get the TurboTax to calculate the correct employer contribution only, remove the amount that you entered as an individual 401(k) employer contribution, unmark the individual 401(k) Maximize box, then go back and mark the Maximize box for a SEP contribution. The employer contribution calculation is the same and the SEP Maximize function does not include any employee contribution. The maximum permissible employer contribution will then be shown at the bottom of TurboTax's Keogh, SEP and SIMPLE Contribution Worksheet and on Schedule 1 line 16.
The self-employed retirement deduction is a personal deduction, not a business expense. It does not reduce the amount of self-employment taxes.