topic Roth 401k contribution for over 50 in Retirement tax questions

Roth 401k contribution for over 50

marculiv — Sun, 19 Jan 2025 22:02:05 GMT

I understand that a sole proprietor may contribute up to 23000 to a Roth 401K with an additional 7500 catch up contribution for those over 50. When I try to enter an amount over 23000 in Home and Business in the "self employed retirement plans" section of "Business income and Expenses" the additional amount over 23000 up to a total of 30500 is not allowed.

How is this to be handled?

Thanks, Marcus

Re: Roth 401k contribution for over 50

dmertz — Mon, 20 Jan 2025 01:38:36 GMT

In 2024 TurboTax, there are separate boxes for the entry of the regular Roth 401(k) contribution ($23,000) and the Catch-up Roth 401(k) contribution ($7,500). Still, your contributions are limited to net earnings from self-employment. Net earnings are net profit minus the deductible portion of self-employment taxes. Also, make sure that you have entered your birthdate correctly, with the year of birth being 1974 or earlier.

Re: Roth 401k contribution for over 50

marculiv — Mon, 20 Jan 2025 02:33:31 GMT

Thank you for the prompt and thorough reply. I'm still a bit confused:

I now see the boxes you mentioned but could you tell me what line and form shows the net earnings figure used to establish the maximum contribution? Is it AGI?

Thanks, Marcus

Re: Roth 401k contribution for over 50

dmertz — Mon, 20 Jan 2025 04:42:11 GMT

"Net earnings are net profit minus the deductible portion of self-employment taxes."

Net profit is on line 31 of Schedule C. The deductible portion of self-employment taxes is on line 15 of Schedule 1 (which comes from line 13 of Schedule SE).

Re: Roth 401k contribution for over 50

marculiv — Mon, 20 Jan 2025 05:07:45 GMT

Excellent, you have really cleared this up for me. Thanks so much for your very helpful and knowledgeable advice.