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It seems that TurboTax made a major mistake in my return about my Solo-401K contribution. How do I escalate it?

My wife and I filed a joint return. We both work for different employers. Additionally, she also runds her own business in spare time.  I maxed my 401-K contribution through my employer. My wife contributed $6k in her Simple IRA account through her employer (they do not offer 401K). TurboTax expert advised that my wife could open an solo-401K account and contribute $22,500 (max for 2023) in that account to save taxes. I enquired if we need to reduce $6k from the max $22,500 but she said that solo-401K is different than simple IRA account and I can contribute full $22,500K. I asked another expert on TurboTax, and she also said same. Then I had final review by an expert, and she said everything looks ok. TurboTax also did not give any error and my returns are accepted. However, now I am reading articles saying that $22,500 limit is across all deferrals.  More than any articles, IRS website says clearly that "A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that his limits on elective deferrals are by person, not by plan. He must consider the limit for all elective deferrals he makes during a year". So now, I will end up paying double the tax + 10% penalty for using TurboTax full-service package.  I have tried to escalate on chat and phone, but no one tells how to escalate.  Please help. 

https://www.irs.gov/retirement-plans/one-participant-401k-plans

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2 Replies

It seems that TurboTax made a major mistake in my return about my Solo-401K contribution. How do I escalate it?

a few items are needed. is she over 50? then there's a maximum additional catch up of $7500. What is t her net schedule C income  - schedule C net - less the 1/2 the self-employment tax on that less any deduction she took for self-employed health insurance?

 

dmertz
Level 15

It seems that TurboTax made a major mistake in my return about my Solo-401K contribution. How do I escalate it?

A published unsupported feature of TurboTax is that TurboTax is unable to calculate the maximum permissible solo 401(k) contribution when the individual also makes salary deferrals to anther employer's plan.

 

https://ttlc.intuit.com/turbotax-support/en-us/help-article/intuit-product-orders/personal-individua...

 

(The document published for 2023 mistakenly lists the 2021 deferral limits, but the fact that TurboTax doesn't support the calculation of the maximum permissible contribution when the individual defers salary to another employer's plan remains.)

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