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Returning Member
posted Feb 19, 2024 12:59:37 PM

TurboTax not letting me deduct full solo 401k contributions

I am amending my 2022 taxes Because I forgot to enter my solo 401k contributions, which was $48,093.

I am self-employed. 

For 2022, per the IRS website, the employee deferral was increased to $20,500. The total limit was increased to $61,000. All of that is deductible.

I inputted $20,500 in elective deferrals, then $27,593 in employer matching (profit sharing) contributions.   

But its only letting me deduct/defer the $20,500.

Why can I not deduct the remaining $27,593? 

0 14 928
14 Replies
Level 15
Feb 19, 2024 4:51:48 PM

Making a $27,593 employer contribution would require at least $148,455 of net profit from self-employment.  Did you have at least that much profit?  TurboTax allowing a deduction of only $20,500 suggests that you had only $22,059 of net profit.

Returning Member
Feb 19, 2024 8:39:01 PM

My income was over $254,000.

There have been previous posts on this topic on this forum, but never saw resolution on how anyone got around it. 

Level 15
Feb 20, 2024 5:11:33 AM

Is your net profit from self-employment determined on Schedule C (or F) or is it coming from Box 14 of Schedule K-1 (Form 1065) with code A?

 

Examine the calculations on TurboTax's Keogh, SEP and SIMPLE Contribution Worksheet.

Returning Member
Feb 20, 2024 6:46:11 AM

My net profit is from adding up my 1099's. 

Again, it is not my income that is the issue. This issue was brought up on numerous other posts, I just need to know what is the workaround. 

Level 15
Feb 20, 2024 12:34:31 PM

It works fine for me in 2022 TurboTax.  The only things that changes from year to year with regard to this calculation are the dollar amounts that are adjusted for cost-of-living.  Otherwise, the computation has not changed for many years.

 

Please provide a link to a post that suggests that 2022 TurboTax is not allowing employer matching contributions to be included in the deduction.  A Google search of these forums produces no such results.  The only search results that appear have to do with user errors.

 

Which lines of TurboTax's Keogh, SEP, and SIMPLE Contribution Worksheet are incorrect?

Does your $20,500 elective deferral appear on Part I line 6a

Does your employer contribution appear on Part I line 6e?

Does Part III line 5 show more than $4,100?  (Line 5 would have to be more than that to be eligible to deduct more than the $20,500 elective deferral.)

 

Returning Member
Feb 21, 2024 8:36:05 AM

Returning Member
Feb 21, 2024 8:39:23 AM

see attached pic.

Does your $20,500 elective deferral appear on Part I line 6a - No

Does your employer contribution appear on Part I line 6e? No

Does Part III line 5 show more than $4,100?  (Line 5 would have to be more than that to be eligible to deduct more than the $20,500 elective deferral.) There is no part 3, line 5, I attached pic

Returning Member
Feb 21, 2024 8:39:42 AM

Level 15
Feb 21, 2024 10:07:07 AM

I asked about information on the Keogh, SEP and SIMPLE Contributions Worksheet.  You've posted a screen-shot of Part III of Form 8606 instead.  Nothing about your questions in this thread involves Form 8606 or a Roth IRA.  

 

If I was to assume that the the specific responses to my questions actually did come from the Keogh, SEP and SIMPLE Contribution Worksheet, the answers indicate that you have not properly made any entries into TurboTax for a regarding a solo 401(k).  However, I suspect that you may have looked an Form 8606 and not the worksheet, so I won't assume that your answers are accurate.

 

 

Returning Member
Feb 21, 2024 1:05:44 PM

I guess I never did that  Keogh, SEP and SIMPLE Contributions Worksheet. I was never prompted to. Where do I fill out, and have Turbotax incorporate it with my taxes? 

Here are screenshots showing where I inputted solo 401K deductions, and where I was told I can only defer the $20,500. 

Returning Member
Feb 21, 2024 1:54:24 PM

My Edward Jones Owner-only 401(k) Guided Solutions Fund Account is neither a SEP, SIMPLE, or KEOGH. 

Owner-only 401(k) | Edward Jones

So the worksheet is not needed.

Again, I need to know how/why I cannot defer the additional $27,593

Level 15
Feb 21, 2024 3:35:14 PM

This worksheet is indeed required since it also incorporates the necessary calculation for solo 401(k) contributions despite TurboTax's naming of the form.  This worksheet in TurboTax implements the worksheet from Chapter 5 of IRS Pub 560:  https://www.irs.gov/pub/irs-pdf/p560.pdf

 

Now that you have made the necessary entries in step-by-step mode of TurboTax to populate this worksheet, view the worksheet.

Returning Member
Mar 10, 2024 12:34:41 PM

I completed the worksheet. 

how does this get imputed into TurboTax? just uploaded to docs? And then they will calculate the additional $ I am owed as a refund? that doesn't make sense 

 

Level 15
Mar 10, 2024 1:08:35 PM

Open the Keogh, SEP and SIMPLE Contribution Worksheet in forms mode of TurboTax and compare line-by line with your hand-calculated result.  Your contributions should be present on some combination of lines 6a, 6c and 6e of Part I of this worksheet.