The calculated maximum SEP IRA contribution in turbotax is much larger than the answer from the worksheet in IRS Form 560. Why?

[fanfare]

What is your Net Schedule C income after expenses?

Figure about 18.6% for your SEP contribution.

If you're not getting that amount, you made a mistake on the worksheet.

[tesuzuki2002]

I have this same issue and have in the past, but didn't pay much attention to it..   Really trying to determine if I am leaving money on the table so to speak.  

When I do publication 560...   

Net Business Profit =  2,032     

SE Tax deduction = $144   

Adjusted Net Profit = $1,888

Using 20% for max allowed from employer for contribution I get $378 that I Can contribute to SOLO 401K from business profits. 

Turbo Tax is telling me that number is $1,888.      Am I missing something with taking the 20% ??   I thought that was all that was allowed. 

My understanding is that in my case with the numbers I have the SOLO 401K and SEP IRA from business profits are the same amount.   Correct??

Any advice would be appreciated.  

Thanks! 

[ThomasM125]

For a solo 401-K plan, you are allowed an elective deferral in addition to the non-elective contribution (25% of compensation.)

The elective deferral can be up to 100% or your compensation, up to certain limits based on your age.