topic Does TT calculate 401k contribution on W2 into Solo 401K max? in Get your taxes done using TurboTax

Does TT calculate 401k contribution on W2 into Solo 401K max?

ctx192021 — Fri, 27 Dec 2024 15:19:27 GMT

I have 401k Contributions (both Traditional and Roth) on my W2 that did not hit year max allowed.

I also have a some income from a sole proprietorship (Schedule C) from which I want to contribution to a SOLO 401k.

When I check off "Maximize Contribution to Individual 401K", it does not seem to take into account the amount contributed already on the W2. The amount it allows to contribute to max out the Solo401K seems way too high.

•Is TT supposed to do this automatically (take into account the W2 401K contribution when calculating the Solo 401 max allowed)?
•Or do I have to manually figure this out and override what TT figures is the max allowed?

•Also, will TT figure out the deductible portion of SE tax into the "max" calculation for the Solo 401K?

Thank you.

Re: Does TT calculate 401k contribution on W2 into Solo 401K max?

dmertz — Fri, 27 Dec 2024 23:50:55 GMT

"•Is TT supposed to do this automatically (take into account the W2 401K contribution when calculating the Solo 401 max allowed)?"

TurboTax is not able to do this automatically.

"•Or do I have to manually figure this out and override what TT figures is the max allowed?"

You must do the calculation yourself and enter the limited Solo 401(k) elective deferral. You must not use the 401(k) Maximize function. To then get TurboTax to calculate the maximum permissible employer contribution to the Solo 401(k) you can use the Maximize function for a SEP contribution instead. The calculation of the maximum employer contribution is the same for both. (Of course if your net earnings from self employment are low enough to limit your elective deferral to the Solo 401(k) such that when combined with the elective deferral to the plan at the W-2 employer would not exceed the maximum permissible combined elective deferral, you could just use the maximize function for the Solo 401(k). In that case there would also be no employer contribution because all of the net earnings would be allocated to the elective deferral.)

"•Also, will TT figure out the deductible portion of SE tax into the "max" calculation for the Solo 401K?"

The Maximize function does take into account the deductible portion of SE tax.

Re: Does TT calculate 401k contribution on W2 into Solo 401K max?

ctx192021 — Tue, 31 Dec 2024 15:34:19 GMT

Thank you for your response.

Could you please explain where you see the employer contribution when you do as you described using the "Maximize function for a SEP contribution"?

When I do this I only see "Maximum Allowed to Qualified Plans', but nothing specific to employer contribution.

Thank you

"To then get TurboTax to calculate the maximum permissible employer contribution to the Solo 401(k) you can use the Maximize function for a SEP contribution instead."

Re: Does TT calculate 401k contribution on W2 into Solo 401K max?

dmertz — Wed, 01 Jan 2025 03:27:27 GMT

Answer Yes when asked if you made Keogh, SEP or SIMPLE contributions and TurboTax will present you with the page where you can mark the SEP Maximize box. Any elective deferral you make to the solo 401(k) will still need to be entered on the Individual 401(k) page.