I am the sole proprietor of a small business. I am using
Turbo Tax for Home & Small Business, entering information in the SELF-EMPLOYED
RETIREMENT PLAN section.
When it asks DID YOU CONTRIBUTE TO AN INDIVIDUAL OR
ROTH 401 (k) PLAN, I say YES.
When asked for my 2018 CONTRIBUTION to these plans, I check the box to MAXIMIZE MY CONTRIBUTION to a 401K.
Turbo Tax tells me that my MAXIMUM 410K CONTRIBUTION is
When asked if I contributed to a Keogh, SEP or Simple Plan, I say NO.
When I get to my Retirement Contributions page is says that my MAXIMUM ALLOWED
TO QUALIFIED PLANS is $38,973.
How did I get from $24,500 to $38,973?
difference is $14,473.
Where do I contribute this amount of $14,473?
$24,500 is your maximum employee elective deferral. The $14,473 is the maximum employer contribution, 20% of your net profit minus the deductible portion of your self-employment taxes. Assuming that you have no other employment that would put you over the Social Security wage limit, the $14,473 maximum employer contribution implies that your net profit from self-employment is about $80,555. The calculations are shown on TurboTax's Keogh, SEP and SIMPLE Contribution Worksheet.
When you contribute to an individual 401(k), you designate the amount that is employee elective deferral ($24,500) and the amount that is employer contribution ($14,473). The contribution form used by your 401(k) trustee is likely to have separate entries for each of these amounts.