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Level 2

Solo401K-Calculation in TT and Catch-up

I enter my solo-401K and I do not see it reduce my tax burden after it is entered.

does it only process after I complete my entire tax?


secondly with catchups; say I contributed 19000 and an additional 6000 in catchup.

do I enter 25000 in employee deferrals? or o I enter 19000 and 6000?

My issue is with the turbotax and entering the information and not with the tax law. 

2 Replies
Level 15

Solo401K-Calculation in TT and Catch-up

I assume that you are a sole proprietor determining your profit on Schedule C (or a farmer determining your profit on Schedule F).


If you are explicitly entering the elective deferral rather than using the Maximize button to maximize both your elective deferrals and your employer contribution, you must enter no more than $19,000 as "Elective Deferrals" and no more than $6,000 as "Catch-Up Contributions."


If your income tax liability is already zero before entering the solo 401(k) contributions, the deduction for the contributions will not reduce your income tax liability below zero.  This deduction cannot reduce your self-employment taxes.  Of course if you have not yet entered everything needed to determine your net profit from self-employment, TurboTax cannot accurately determine your deduction for the solo 401(k) contributions.  Since your solo 401(k) contribution is limited by a number of different factors all taken into account on TurboTax's Keogh, SEP and SIMPLE Contribution Worksheet, you won't see any deduction (and won't be permitted any contribution) until your Schedule C shows a profit on line 31.

Level 2

Solo401K-Calculation in TT and Catch-up

thanks; that makes sense; the software is not always straightforward

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