I am self-employed and have a solo 401k.
When I add the proper amount to the "elective deferrals" box, the "federal tax due" amount decreases. This makes sense since this is tax-deductible.
However, when I add my "employer matching (profit sharing) contributions," this has no impact on the "federal tax due" amount.
My understanding is that, for self-employed people, both employee and employer 401k contributions are tax deductible. Is this incorrect?
Is your taxable income already zero before adding the employer contribution? The self-employed retirement contribution cannot reduce your income taxes below zero. It cannot reduce self-employment taxes or any other Other taxes on Schedule 4.