topic Is 401K employee contribution limit separate for income from an employer and income from self-employment? In other words, is it 18K combined or 18k for each income source in Get your taxes done using TurboTax

Is 401K employee contribution limit separate for income from an employer and income from self-employment? In other words, is it 18K combined or 18k for each income source

salsify — Thu, 06 Jun 2019 13:31:10 GMT

I was under the assumption that employee 401K contribution limit is $18K total for income from ALL sources. I have entered a W2 with $11K of deferred income to an employer's 401K plan. As the same time, Turbo Tax allows me to have the maximum 401K contribution of $53K ($18K employee + $35K employer). Is this correct?

Yes. Although your employee contribution is limited to $1...

KenH1 — Thu, 06 Jun 2019 13:31:11 GMT

Yes. Although your employee contribution is limited to $18k per year ($24k if over 50), the combined employer/employee limit is $53k. Note that the employer contribution is not reported anywhere on your tax return,

The $18,000 annual limit is per individual. TurboTax is...

dmertz — Thu, 06 Jun 2019 13:31:13 GMT

The $18,000 annual limit is per individual. TurboTax is incapable of enforcing the $18,000 per-individual limit for elective deferrals and Roth contributions to an Individual 401(k) when you have also made such contributions to employer plans.

As a workaround in TurboTax, do not mark the Maximize box for an Individual 401(k). Instead, enter only the remaining $7,000 of elective deferral or Roth 401(k) contribution on the Individual or Roth 401(k) page, then on the following pages mark the Maximize box for a Keogh Profit Sharing Plan. This will cause TurboTax to calculate and include the maximum permissible deductible employer contribution.