How do I allocate deductions for contributions to an individual 401k from 1099 income earned in multiple states?

[hpn205]

If I have 1099 income for one business derived from work in multiple states that are contributed to one individual 401k, what is the appropriate way to file the contributions?

For example, if I had:

$30k from state A, tax rate 10%
$10k from state B, tax rate 0%
$10k from state C, tax rate 5%

Assuming my max contribution were $28,294 ($19k employee deferral, $9,294 employer contribution):

Would the contributions be deducted proportionally from each state’s income?

(60% of the $28,294 from state A,  20% from state B, 20% from state C)

Or would I be able to preferentially defer the entire $28,294 from state A since it has the highest tax rate?

[MarilynG]

Report your total 401K contributions in your Federal return.  This reduces your taxable income, and this amount is often where a State return begins, so you don't get an additional state deduction for your 401K.

If you file a Schedule C for Self Employment, your total 401K contribution is a business expense that is calculated into your Net Profit or Loss amount on your Federal Form 1040, so again does not get entered separately into a state return. 

Here's how to enter your Self-Employed 401K Contrbution:

1.  Income & Expenses (Do not go into the "Self Employment" section)

2.  At the bottom, "See list of all income"

3.  Pick "Self-Employment Retirement Plans"

You would report all your income in your Resident State, and get credit for Taxes Paid to Other States.  

Click the link for more detailed info on Reporting Income in Multiple States