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mblocher
New Member

TurboTax is broken: TT Self Employed version doesn't let you enter solo 401k employee contributions if only entering K1 pass through income.

It forces you to enter self-employment (eg. 1099 income), which is not correct.  I have only K1 income from my LLC, through which I made direct solo 401k employee contributions (so it's not on my W2).  This should be allowed as only the Employer contributions are deducted on the K1.  TurboTax support was of no help, after 90 minutes speaking with them. Anybody found a solution?
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1 Reply
dmertz
Level 15

TurboTax is broken: TT Self Employed version doesn't let you enter solo 401k employee contributions if only entering K1 pass through income.

You mentioned receiving a W-2 from this entity, so the Schedule K-1 is apparently a Schedule K-1 (Form 1120S) from an S corp.  None of the pass through income reported on this Schedule K-1 is compensation.  Also, you are not self-employed, so you are not permitted to take a self-employed retirement deduction on your individual tax return with respect to this (which is why there is no way provided in TurboTax to enter the contribution).  Any elective deferral to the 401(k) established under this S corp was required to have been made from your compensation reported on the W-2, deposited by the S corp and reported in box 12 of your W-2.

 

You've apparently made an impermissible contribution to the solo 401(k).

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