topic If I annualize my self-employment income, but contribute to 401k at the end of the year, can I deduct my contributions from my annualized AGI? in Business & farm

If I annualize my self-employment income, but contribute to 401k at the end of the year, can I deduct my contributions from my annualized AGI?

virajbdeshpande — Wed, 11 Feb 2026 04:34:08 GMT

Hi,
I had self-employment income in the first quarter of tax year 2023. I did not make any estimated tax payments. In early 2024, I am contributing this income as elective deferral to individual 401k account. When I annualize my income, can I report the self-employment income from the first quarter of 2023 as 0 given that the entire amount is being contributed to the pretax 401k account?

Re: If I annualize my self-employment income, but contribute to 401k at the end of the year, can I deduct my contributions from my annualized AGI?

Affordabletaxes2021 — Sun, 04 Feb 2024 04:17:17 GMT

If you earned self employment income and had to pay self employment taxes . Then you contributed to your 401k with the remains. You have to recognize the taxes on self employed work which is your social security tax and Medicare tax .

Re: If I annualize my self-employment income, but contribute to 401k at the end of the year, can ...

PatriciaV — Mon, 05 Feb 2024 16:05:56 GMT

The 401K contribution does not offset the self-employment income in the first quarter for the annualized income method. This is especially true because you are making the contribution after the end of the related tax year.