Question on Solo 401K contribution and Net profit

[hbb8344]

I am self employed and make a contribution to my solo 401K each year.  I have used a CPA in prior years and my understanding has always been that whatever I contribute to my solo 401K reduced my total net profit.  (i.e. salary of $20K, contribute $12K to solo 401K, net profit would be $8k of taxable income). 

Currently when I look at the Schedule C form, it is showing the net profit of $20K, with nothing showing on Part II, line 14b.  In the past the amount contributed to my solo 401K would show up here.  Am I missing something in Turbo Tax or can I just override and enter the amount contributed to line 14b?

Thanks very much for any advice / suggestions.

[ThomasM125]

No, your  solo 401-K contribution would be entered on Form 1040, schedule 1.This would be your schedule C net income less one half of your self-employment tax and your retirement plan contribution for yourself. 

Internet research will indicate that there are alternative methods of treating this, but the authoratative IRS interpretation can be found in the IRS article.

You can learn more in this IRS article.

[Edited 6:36 AM 2/20/26 PST]

@hbb8344 

[dmertz]

@ThomasM125 , is incorrect.  No part of a solo 401(k) contribution is reportable on Schedule C.  Line 19 of Schedule C is only for employer contributions made to the accounts of non-owner employees (and the only sort of non-owner employee you can have with a solo 401(k) would be your spouse).

The employer contribution made on behalf of yourself does not reduce net profit.  It does not reduce your self-employment taxes.  If your tax returns prepared by your CPA reduced Schedule C net profit by some portion of your solo 401(k) contributions, your CPA prepared your tax returns incorrectly.  No part of the contributions made to your solo 401(k) account is permitted to be on Schedule C.