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Error when entering spouse's solo 401K entry

I have my wife on W2 and I paid my wife $60,000.  On W2 box 1 has $34,000 and Box 12 d is $26,000 which is the maximum allowable elective deferrals for age 55. 

 I selected self-employed Retirement option under BUSINESS tab, and entered 19,500 for Elective Deferrals and 6,500 for Catch up for both my wife and myself.  I did not enter Employer Matching Contribution but checked the box for Maximize Contribution to individual. 

After skipping few other screens and the result of Maximum Allowed to Qualified Plans under Your Retirement Contributions screen is 0 for my wife and my wife has to withdraw 26,000 from the plan.  

What is the issue?  Why can't my wife participate in my solo plan?

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5 Replies
ErnieS0
Expert Alumni

Error when entering spouse's solo 401K entry

Your wife can participate in your Solo 401(k). What's happening is that you are double entering your wife's contribution on the W-2 and in the self-employed retirement section.

 

Your wife is not self-employed. Her $26,000 was already deducted on her W-2. You may be able to add a profit sharing contribution.

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Error when entering spouse's solo 401K entry

Thank you for the explanation. I was trying to see where should I enter that 26000 contribution to 401k. It is on w2 but I as an employer is paying for this amount and I should be able to deduct this from business expense. 
Eg if I paid my wife 30000 salary and 26000 is her elective referral, and box 1 will show 4000. When I entered wages under business expense it says I should enter box 1 which is 4000. What happened to 26000? I cannot find any place to enter 26000. 

PatriciaV
Expert Alumni

Error when entering spouse's solo 401K entry

The amount you reported on W-2 Box 12 Code D (401K) is an expense on Schedule C under Employee Expenses >> Pension Plans.

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Error when entering spouse's solo 401K entry

PatriciaV, I agree this entry should show up on line 19 of Schedule C.  How do I enter this in TT?

PatriciaV
Expert Alumni

Error when entering spouse's solo 401K entry

Go to your Business Summary page. Under Business Expenses, choose Other Common Business Expenses. Choose Employee Expenses >> Pension Plan >> Start/Update, add a description and the amount.

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