topic The calculated maximum SEP IRA contribution in turbotax is much larger than the answer from the worksheet in IRS Form 560. Why? in Retirement tax questions

The calculated maximum SEP IRA contribution in turbotax is much larger than the answer from the worksheet in IRS Form 560. Why?

jmorser — Wed, 18 Mar 2020 03:28:36 GMT

Re: The calculated maximum SEP IRA contribution in turbotax is much larger than the answer from the worksheet in IRS Form 560. Why?

fanfare — Wed, 18 Mar 2020 11:18:49 GMT

What is your Net Schedule C income after expenses?

Figure about 18.6% for your SEP contribution.

If you're not getting that amount, you made a mistake on the worksheet.

Re: The calculated maximum SEP IRA contribution in turbotax is much larger than the answer from the worksheet in IRS Form 560. Why?

tesuzuki2002 — Fri, 03 Apr 2020 23:00:32 GMT

I have this same issue and have in the past, but didn't pay much attention to it.. Really trying to determine if I am leaving money on the table so to speak.

When I do publication 560...

Net Business Profit = 2,032

SE Tax deduction = $144

Adjusted Net Profit = $1,888

Using 20% for max allowed from employer for contribution I get $378 that I Can contribute to SOLO 401K from business profits.

Turbo Tax is telling me that number is $1,888. Am I missing something with taking the 20% ?? I thought that was all that was allowed.

My understanding is that in my case with the numbers I have the SOLO 401K and SEP IRA from business profits are the same amount. Correct??

Any advice would be appreciated.

Thanks!

Re: The calculated maximum SEP IRA contribution in turbotax is much larger than the answer from t...

ThomasM125 — Mon, 06 Apr 2020 21:44:24 GMT

For a solo 401-K plan, you are allowed an elective deferral in addition to the non-elective contribution (25% of compensation.)

The elective deferral can be up to 100% or your compensation, up to certain limits based on your age.