I am a sole proprietorship with a solo 401K., no employees. When I ask TurboTax to calculate the max solo 401K contribution, it gives me a total of $36,000. It then says that only $24,000 is deductible. Not sure which amount to use now, the max contribution number or the max deductible number. Obviously, the higher contribution results in lower overall tax, but I just want to make sure I'm doing this correctly and not missing anything important. Thanks.
$24K is the max you can put into a 401K per year ... any more than that will get you in big trouble with the IRS. So even though you have enough income to put in more you are limited to the annual maximum.
I'm over 50 yr old and have a solo IRA. I thought the max I can contribute is $62k for 2019. When I enter $19k for employee contrib and $6k for catchup and $37k for employer contrib, TurboTax enters $60,258 instead of $62k? I entered $61k for 2018 and TurboTax was fine with my numbers?
Are there enough earnings in the company (per the tax return) to cover $62,000? That number sounds like one being limited by the earnings/net income.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
AGI = $258k. Taxable income = $209k. Should be sufficient earnings to cover funding $62K into my business Solo IRA. I funded $61k in 2018 with earning about $15k higher than 2019. Schwab told me $62k was the limit so I already funded this amount into the Solo IRA. Maybe there is a bug in the TurboTax software?