topic Re: Self employed 401(k) contribution limits in Retirement tax questions

Self employed 401(k) contribution limits

Zweifel — Mon, 09 Mar 2026 11:27:20 GMT

I'm 57 years old and I have 2 jobs. I work for company A and I contributed $11,500 to that 401(k). I also moonlight and earned an additional $30,000 net income and I'd like to put as much money as I can into my Self Employed 401(k), but I'm confused by the amounts the TT tells me I can contribute when I tell it to maximize my contributions.

The way I understand it, my total elective deferrals can't exceed $26,000. I've already contributed 11,500 to company A, so I choose 8000 elective deferral plus 6500 catch up contribution to my self employed 401k.

The profit sharing contribution is capped at 20% of 30,000 or 6000, making my total contribution to my self employed 401k 20,500 (8000 + 6500+6000).

If I choose Maximize contribution, TT just tells me I can defer a maximum of 23,332. Who's right?

Re: Self employed 401(k) contribution limits

ErnieS0 — Sat, 09 Apr 2022 12:59:47 GMT

You must subtract one-half of your self-employment tax from the profit sharing calculation, so it’s not $30,000 x 20%.

You can review the TurboTax calculation on the Keogh/SEP Wks.

Tap Forms in the top right
In Forms in My Return, select Keogh/SEP Wks
When you are done, tap Step-by-Step in the top right to return to the interview mode

Re: Self employed 401(k) contribution limits

Zweifel — Sat, 09 Apr 2022 19:52:40 GMT

I figured it out.

I assumed that TT looked at my W2 information to figure out my maximum contributions, but it doesn't. I have to enter the amount that I already contributed to Company A's 401k. Therefore, the total of my elective deferral should be 19500 and I have a 6500 catch up. Then TT tells me that the amount to contribute for my Employer Match is 1164.

Re: Self employed 401(k) contribution limits

dmertz — Sun, 10 Apr 2022 02:03:28 GMT

TurboTax's Maximize function for an individual 401(k) doesn't take into account elective deferrals or Roth contributions you've made to another employer's plan, so you have to use a workaround. In the individual 401(k) section you can enter up to a $14,500 elective deferral or Roth 401(k) contribution, but to calculate the maximum employer contribution you'll have to use the Maximize function for a SEP contribution. The employer-contribution calculation is the same for both a SEP plan and an individual 401(k).

With $30,000 of net profit from self-employment, your maximum employer contribution to the individual 401(k) is $5,576. Adding the $14,500 of elective deferrals brings the total maximum contribution to your individual 401(k) to $20,076 (or slightly more if you max out the Social Security wage cap between your two jobs, but no more than $20,420).