topic Entering ROTH Solo 401K Employer (Profit Sharing) contributions in Retirement tax questions

Entering ROTH Solo 401K Employer (Profit Sharing) contributions

zubinh23 — Thu, 26 Feb 2026 05:08:48 GMT

I am trying to enter an EMPLOYER PROFIT SHARING contributions in the Solo 401K section of TurboTax Online.

I am following the instructions in this article: How do I enter a Solo 401(k) in TurboTax?

The article states the following: "Enter your Employer Matching (Profit Sharing) Contributions for 2025. Note: There's no Employer Matching box for Roth 401(k)s because any matching employee contributions are pretax."

This is completely FALSE and outdated. Roth, AFTER TAX profit sharing contributions are indeed allowed in a Solo Roth 401K beginning with the 2023 tax year. My Solo 401K custodian confirmed this and allows Roth profit sharing contributions. The only issue is that TurboTax does not allow the entry and instead continues to publish incorrect information in a very recently updated article.

Thank you for any suggestions with resolving this.

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

DaveF1006 — Fri, 27 Feb 2026 14:34:18 GMT

TurboTax’s regular Solo 401(k) interview is designed for deductible contributions. Because Roth employer contributions are taxable and not deductible, they aren’t included in the usual retirement deduction sections. Here is how to enter as taxable income.

Enter as a "Substitute" 1099-R (The IRS Recommended Method)

The IRS requires these contributions to be reported on Form 1099-R with Code G (in Box 7) for the year they are allocated to your account. Your custodian should eventually issue you a 1099-R for this. If they haven't yet, or you are filing before it arrives, you can enter a "Substitute" 1099-R in the Retirement Plans and Social Security section in your personal return..

Box 1 (Gross Distribution): Enter the Profit Sharing amount.
Box 2a (Taxable Amount): Enter the same amount (since you are paying tax on it now).
Box 7 (Distribution Code): Enter Code G.

After this is entered, there is a follow-up section where you will check that this is a substitute 1099R.

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

zubinh23 — Sat, 28 Feb 2026 16:38:01 GMT

Thanks for trying but your answer does not make sense. A 1099R is issued for Distributions only. I am talking about how to enter a profit sharing Contribution in Turbotax.

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

AmyC — Mon, 02 Mar 2026 23:57:47 GMT

If you have gone through the employer matching contributions section of the program, you will note that many plans are there, but not the SOLO ROTH 401k. The IRS actually requires you to enter your solo ROTH 401k contributions for two reasons:

It must be recorded as a contribution to your plan and
it must be taxed as income to you.

The IRS approved method to report this is - a 1099-R for the year the funds are allocated. The code G in box 7 is the key. It tells the IRS the money when into a ROTH account. You can follow the steps outlined by @DavidF1006 above.

The 1099-R directions states that Roth contributions must be reported on Form 1099-R for the year in which the contributions are allocated. See Q&A L-9 of Notice 2024-2.

Reference: IRB 2024-2

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

AKBunk — Mon, 16 Mar 2026 18:38:33 GMT

Just to clarify: I can make the employer contribution to the Roth Solo 401k up until the tax due date 4/15/2026 for tax year 2025, but the 1099-R will be issued in 2027 for tax year 2026. I report this in Turbotax as a substitute 1099-R for tax year 2025?

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

PatriciaV — Mon, 16 Mar 2026 20:50:34 GMT

The "substitute" Form 1099-R that you enter for tax year 2025 reports contributions for that year. You will ignore the 1099-R (if any) reporting those contributions that is prepared for tax year 2026. As previously mentioned, Code G informs the IRS this amount is a designated Roth nonelective contribution and/or designated Roth matching contribution for the year in which the contributions were allocated.

@AKBunk

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

user17743627688 — Tue, 24 Mar 2026 14:40:35 GMT

I've been following this Q&A because I have the same issue. What's still not clear to me is:

1) When I receive a 1099-NEC, the entire amount is considered taxable income to my single member LLC. I reduce the taxable amount by my business expenses, then pay tax on the remaining.

2) If I create a substitute 1099-R, I'm now adding the employer contribution to my Solo Roth 401k to my income, effectively being double taxed on this income. (Taxed first as the income is reported on a 1099-NEC, then taxed again when I create a substitute 1099-R.)

How do I subtract the employer contribution amount from my 1099-NEC income?

Thanks, Garry

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

AmyC — Tue, 24 Mar 2026 15:44:59 GMT

Subtracting retirement plan contributions from 1099-NEC income on Sch C is not done for either traditional or ROTH. Both retirement plans must pay SE tax on full business income after expenses. Sch C line 19 is for common-law employees when you make contributions to their retirement plans. You do not use Sch C line 19 since you are the owner.

Pre- tax dollars vs after tax dollars and how the income flows.

Pre-tax traditional 401k: The employer contribution to the retirement plan is subtracted on Sch 1 under self-employed qualified plans. The employee contribution is reported on the same line 16 on Sch 1. Taxed as income later - when withdrawn.
After tax ROTH 401k: The income must be taxed before it can be contributed. No deduction taken on Sch 1 so income is taxed and available funds to contribute to ROTH 401k. 1099-R is used to report the contribution to retirement plan, It is not taxed since rollover code G is used. You are taxed once on the income.

ROTH 401K

To file the 1099-R (boxes not mentioned are left blank):

Box 1 Enter total employer contribution
Box 2a enter same as box 1
Box 5 is blank
Box 7 code G
Not an IRA/SEP/SIMPLE -solo 401K is a qualified plan, not an IRA for this purpose.

Your employee contributions are not reported on your tax return since they are after tax dollars.

@user17743627688

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

user17743627688 — Wed, 25 Mar 2026 14:15:50 GMT

Thank you! I think I'm almost there! One final (I hope) question: Is the 1099-R with code G only used for the EMPLOYER contribution to the Roth and the EMPLOYEE contribution is just completely left off the tax return since it's an after tax contribution?

Re: Entering ROTH Solo 401K Employer (Profit Sharing) contributions

PatriciaV — Sun, 29 Mar 2026 19:07:26 GMT

Per the IRS Instructions for Form 1099-R Table 1, Code G is used for Direct Rollovers, which reports the employer contribution as non-taxable. The employee contribution has already been taxed and is not reported on the tax return.