401k contribution limit wrong in turbotax home and business 2023

[davinci68]

Turbotax won't let me e-file because it thinks I'm over the $27000 limit for 401k. Keeps showing me an error and flagging line 6a on the worksheet for me to change my 401k contribution

This is an error, the contribution limit for 2023 is $30K (including catchup, I'm 55)

I talked to a turbotax agent on the phone and they advised I delete my K1 statement and re-enter it to fix the problem. Spent over an hour re-entering all the partnership data and deductions associated with the business and still flags the same problem

Anyone else having this problem?

I'm pretty sure this is a software bug. How do I reach someone who can fix the code to the appropriate limit?

[MinhT1]

Please clarify.

Is it a Solo 401(k)? How much did you wish to contribute?

[davinci68]

The account does not specify "solo 401k" on it. How do I know if it is a Solo 401k? I contribute to it through my employer payroll deduction. My employer is a partnership and I and considered self-employed for tax purposes. The contribution is listed on the K1 statement line 13R. My contribution last year was $30000 which Turbotax is flagging as above the $27000 limit. I also had a $43500 Keogh contribution for a total $73500 contribution listed on K1 statement line 13R

[MinhT1]

The maximum contribution to a 401(k) plan for tax year 2023 is $22,500. There's a catch-up contribution of $7,500 for individuals aged 50 and over, making a total of $30,000.

For 2024, the maximum contribution is increased to $23,000 and the catch-up amount to $7,500, making a total of $30,500 for individuals aged 50 and over.

See this IRS document.

@davinci68 

[Edited 3/20/24 | 5:33 AM PST]

[davinci68]

Thanks for the reply, but you are INCORRECT. The catchup contribution in 2023 is $7500, not $6500, which is the limit for IRA contribution in 2023. So the total contribution limit is $30k for 2023.

My employer and the 401k/Keogh custodian Charles Schwab use the IRS tables to set the maximum contribution automatically.

Even if the limit was $29,000, for argument sake, why is turbotax flagging it as $27000?

This is a bug in the software, can we get someone to look at it?

[greenvalley]

I am having the exact same problem. My 2023 contribution to an individual 401(k) was $28,600. As you noted, the actual contribution limit for 2023 was $22,500 plus a catchup of $7,500 for those over 50 -- for a total of $30,000. But Turbotax flags the entry (in Smart Check) with this notation:
“Taxpayer elective deferrals to an individual 401k plan should not be greater than $27,000.”
Can someone at Turbotax respond and let us know what is causing this error?

[MinhT1]

@davinci68 

@greenvalley 

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to us by following the directions below:

TurboTax Online:

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen. 
3. A drop-down will appear. Select Tools  
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token number in a reply to this post.

TurboTax Desktop/Download Versions:

1. Open your return.
2. Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”*
3. This will generate a message that a diagnostic copy will be created.  Click on OK and the tax file will be sanitized and transmitted to us.
4. Please provide the Token Number that was generated in the response. 

*(If using a MAC, go to the menu at the top of the screen, select Help, then,Send Tax File to Agent”)

[dmertz]

See the identical circumstances addresses in the following post:

https://ttlc.intuit.com/community/retirement/discussion/keogh-sep-and-simple-contribution-sheet-not-...

This is apparently becoming a commonly reported problem now because partnerships are just now sending out Schedules K-1 for 2023.

[davinci68]

I sent the diagnostic data

the toke number is 

1214068

[Inuit_User]

Same problem as described by original post: TurboTax Home & Business error message of excess SE 401k contribution.  Maximum allowed amount has been entered correctly. Please fix. 

Edit: human error. Schedule C net earnings limit. 

[CatinaT1]

This is a known issue. You can follow this link to get updates.

@davinci68 

[davinci68]

any estimate as to when this will be fixed?

Wondering if I should just file by mail instead of waiting for a Turbotax fix

[Neil_D]

Honestly, when can we get a fix for this?  It's getting close to the filing deadline.  This is crazy -- how can you not have accounted for the millions of us who have catch-up contributions?

[dmertz]

The 3/28/2024 update fixes this bug.

[CFH2022]

The online version still has this mistake. I just worked on ours, and it stated there was an overpayment of $7,500, which was the allowed catch-up amount.