Tracking Basis for Solo 401k After Tax Contributions

[hnataraj]

I am a sole proprietor (Schedule C) who has a Solo 401k. 

I Solo 401k plan allows for after tax contributions, and in 2023 I want to take advantage of it.

I don't see a place with TurboTax that allows me to track and report basis (after tax contribs) for Solo 401k, similar to what is available in the IRA section.

I am very familiar with the IRA basis section and use it. Just don't know how to avail the same feature for the Solo 401k.

Please advise.

 

[dmertz · Accepted solution]

Tracking after-tax basis in a solo 401(k) has nothing to do with your individual tax return.  It's the plan administrator's responsibility to track the amount of basis in the after-tax sub-account of the traditional 401(k), calculate the proportion of after-tax basis in any distribution from the solo 401(k) and and report in box 5 of Form 1099-R the amount of after-tax basis included in a distribution.

The reason that individuals must track basis in traditional IRAs is that such tracking is the individual's responsibility because the basis belongs the individual, not to any particular traditional IRA account owned by the individual.  Unlike 401(k) plans, all of your traditional IRAs are treated in aggregate as one large traditional IRA.