Where do I exactly enter my solo 401(k) employer contribution portion using Turbotax Home and Biz Windows?

[totokomo]

I understand how to enter my solo 401k employee contribution portion, but where do I exactly enter my solo 401(k) employer contribution portion using Turbotax Home and Biz Windows version?   Is it Employer Matching(Profit Sharing) contributions?

[DavidS127]

Click the "magnifying glass Search" icon on the top row, enter "solo 401k" in the search window and press return or enter, and then click on the "Jump to solo 401k" link.  When you answer "Yes" that you contributed to an "individual or Roth 401(k)" the next screen will have the "boxes" you need to enter the employee Elective Deferrals (employee) and Employer Matching amounts.

[DavidS127 · Accepted solution]

So, yes, the Employer portion is entered is the Employer Matching (Profit Sharing) box.  If you have questions about the "solo 401(k)", see the IRS website at this link.

[MK48]

I'm having a problem, and searching the community led me to your post. I am self employed with a solo 401k. I have input the Employee elective deferral contributions and the Employer Matching contributions into the TurboTax software, but only the Employee contributions are being deducted. The Employer contributions are not being deducted from my income and therefore not reducing my tax liability. It seems like a problem in the software. Do you have any suggestions or solutions for having the Employer contributions deducted?

[mweeconsulting]

Yes! I'm having this exact same problem! How can I get the employer contribution (myself as an employer to myself as an employee) to show up on Line 15 of Schedule 1 as well (only the Employee's Elective Deferral amount currently shows up)?

[DaveF1006]

The question I have is what type of Business Entity do you have? Is it a sole proprietorship or S-Corp, or a multi-,member LLC? in your wording, it sounds like you may have issued a W2 to yourself and claimed the Employee Elective Deferral Contribution in which you already claimed a pre-tax contribution. 

Are you trying to claim the same contribution or did you make additional contributions to your 401K? Also, why did you issue a W2 to yourself if you are a sole proprietor? I need to ask these questions just so I can give you the right advice.

[mweeconsulting]

For myself (I'm tagging onto this string), I'm a sole proprietor and file jointly with my husband. I don't issue myself a W-2.

Here's an example. 

The max an individual under 50 can contribute is $19,500.  Let's say my company's net income (which ends up being my compensation) is only $15,000, so I as an employee "defer" $15,000 by cutting a check and depositing it into my solo 401(k) account.  As the employer, I can also make an employer contribution of $3,000 (20%) - I send a check to my account, designating it as an employer contribution. 

Now in TurboTax Home & Business, I enter the $15,000 under "Employee Deferral" and, supposedly, the $3,000 in the "Employer Contribution" box.  The problem is that after entering this info, I expect to see $18,000 in line 15 of the 1040's Schedule 1, but I only see $15,000. TurboTax doesn't seem to realize it needs to add the 2 numbers together for those of us who are have solo (single-participant) 401(k)s who are both employee and employer.  According to the instructions*, for people like us, the employer contribution does not go on Schedule C, but is combined with the employee Deferral amount.  I can't "bypass" this by entering $18,000 into the employee Deferral box since it knows my income was only $15,000 and won't allow me to deduct more (if it thinks that's what I actually deferred as an employee/individual).

* From Instructions for Line 19 of Schedule C:

"Enter your deduction for the contributions you made for the benefit of your employees to a pension, profit-sharing, or annuity plan (including SEP, SIMPLE, and SARSEP plans described in Pub. 560). If the plan included you as a self-employed person, enter the contributions made as an employer on your behalf on Schedule 1 (Form 1040), line 15, not on Schedule C."

How can I enter the $3,000 so it shows up properly on my Schedule 1, and therefore reduces my taxable income by $3,000?

Thanks!

[lmelvoin]

I am having the same problem. The employer profit sharing deduction is not reducing my overall taxable income, as the IRS rules allow. Has anyone found a solution to this problem?

[BillM223]

The total amount of what you are able to deduct of your contributions to your 401(k) as a self-employed taxpayer is limited to your "net earnings from self-employment" which is your net profit from Self-employment less the deductible portion of self employment tax. If you have elective deferrals (which I think you did - this is the amount deferred from your Net self-employment income). then the total amount that can be deducted is limited to your net earnings from self-employment (see above), which I imagine is less that you expected.

If you are using the desktop (download) version of TurboTax, you can see how line 15 on Schedule 1 (1040) is calculated on a worksheet entitled "Keogh/SEP Wks" (yes, despite the name of the worksheet, Part III is the Detail of the Maximum Allowable Deduction ... for Individual 401(k) Plans).

So if your elective deferral equals or exceeds your net earnings from self-employment, then no amount of the employer's  contribution will be added in.

This is explained in Chapter 6 in IRS Pub 560,(note: this is still the 2020 version) in looking at ."Table and Worksheets for the Self-Employed" starting on page 24 and following.

@lmelvoin

@mweeconsulting

[Edited 1/10/2022 8:50 pm CST, completed the last sentence in the first paragraph which was left incomplete in the original answer]

[lmelvoin]

Thank you so much 🙂

[favonianzs]

I am having the same issue. Have you found a solution?

[DoninGA]

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@favonianzs wrote:

I am having the same issue. Have you found a solution?

---

Click on Tax Tools on the left side of the program screen.

Click on Tools.

Click on Topic Search.

Type in self-employed retirement.

With the key words highlighted, click on GO.

[DoninGA]

@favonianzs My prior answer is if you are using the 2022 TurboTax online web-based editions.  If you are using the 2022 TurboTax CD/Download desktop editions the procedure is a little more convoluted but it will get you to the screen you need - 

Click on the Search icon in the upper right of the desktop program screen.

Type in self-employed retirement and Enter

On the resulting screen click on How do I enter a Solo 401(k) in TurboTax?

This takes you to another entry screen where you need to type in again self-employed retirement and Enter

Click on Jump to self-employed retirement

[jglsea]

I have found where to enter the data, but as described in several of the posts above, my entry of my employer contribution is not "taking" - it is coming out as "0".

Jim

[DaveF1006]

It depends.  There could be two reasons for this.

• You may have experienced a net loss in your business and not able to take advantage of the deduction.
• You contribute to a Roth 401K. Roth contributions are not deductible business deductions.

@jglsea