Solo 401 K contribution keeps showing up as a SEP???

[Tarheel72]

I have a solo 401 K that I have just started and I am making a contribution for 2021 tax year (one time IRS allowance). I am not allowed to make the emploree contribution for 2021 but I can make the employer contribution. I read to enter that in the box that says Employer Matching (Profit Sharing) Contributions. But when I do that the retirement contributions page shows the contribution to a SEP plan, no contribution to a Individual 401 k plan and an idential matching employer contribution. If I do not enter anything at all in any of the boxes showing contributions, the retirement contributions page still shows the same previous amount as a SEP contribution but nothing in the other boxes.  I don't even know how this is possible.  And in this view there is no individual 401 k row even there anymore. No where have I indicated a SEP contribution. I actually checked that we would NOT be making a contribution to a SEP plan. What am I doing wrong and how can I show my contribution was to my individual 401 (k) and not to an SEP, so that the deduction is given and credited to the correct retirement plan?  At this point it is still showing a contribution to a non existant SEP account even though I have removed all references to any contribution at all.  I'm totally lost here.

[FangxiaL]

Here’s how to enter your Solo 401(k) contributions in TurboTax:

1. Open or continue your return
2. In the search box, type self-employed retirement plans (be sure to include the hyphen). Select the jump-to link at the top of the search results
3. On the Self-Employed Retirement Plans screen, answer Yes to the question Did you make a 2021 self-employed retirement plan contribution?
4. On the next screen, answer Yes to Did you contribute to an Individual or Roth 401(k) plan?
5. On the next screen, to enter your employee contributions, enter your Elective Deferrals and any Catch-Up Contributions you made in 2021
6. To enter your company contributions, enter your Employer

[dmertz]

Under these circumstances, the maximum employer contribution to a Solo 401(k) is the same as the maximum contribution to a SEP plan.

[Tarheel72]

Thank you.  I appreciate your response.  Yes, I know the contribution is the same but the rules are different and I am concerned that my return will show a contributioon to a SEP as opposed to what I actually have, an individual 401 K.  And since both are listed and it shows the contribution to the SEP but nothing to the 401 k I was concerned.  I don't really want to start out with the wrong information in the return.  Do you know if there is any way to change it?  And why it is showing up in a SEP when I never chose one?  I am still baffled as to why it shows up when I don't enter any data into the contributions screen and why it doubles the contribution when I do enter data into the employer contribution box.  Thanks again.

[Tarheel72]

not sure you read the message.  I did exactly what you said.

[dmertz]

The tax return is the same either way, simply the employer contribution as your self-employed retirement contribution on line 16 of Schedule 1.  Since you are not eligible to make an employee contribution , if you want to make the maximum employer contribution you should just mark the Maximize box for a SEP contribution.  This will prevent TurboTax from calculating any employee contribution.

[Tarheel72]

you would think so but it doesn't.  It doesn't realize the rules are different.  normally I couldn't even create a 2021 solo 401 k after 12/31 and make a late contribution to it.  but IRS is allowing it this one time, but I can only make the employer contribution, not the employee.  If I check the max box it recalculates everything and since it is showing up as ad SEP it assumes I can go back and make all max contributions.  And if I just put the number in the profit sharing employer's contribution box it assumes it is matching my employee's contribution and simply doubles my amount.  The only way I can get the corect number is to actually leave every box blank.  And somehow it has recorded my contribution from a previous effort and now shows it up as a SEP contibution.  So the number is correct but not the plan.  And I would love to know how it keeps this number and where it is puling it from since I leave all of the boxes empty.

[dmertz]

At some point you must have marked the Maximize box for a SEP contribution and that remains marked.  You are correct that TurboTax does not enforce the employer contribution limit across both SEP and 401(k) plans.  It instead just calculates the maximum permissible deduction under the assumption that you are eligible to make employee elective deferrals to the 401(k).  When you enter an amount in the profit-sharing box TurboTax is adding that to the maximum SEP contribution that is resulting from having marked the Maximize box for the SEP.

Just leave marked the Maximize box for a SEP contribution and enter nothing for an individual 401(k), then verify that the amount on Schedule 1 line 16 is correct.