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New Member
posted Jun 12, 2020 10:49:48 AM

Self Employed 401k

I have Turbo Tax 2019: Home& Business: Personal & Self-Employed on my computer. I entered my Self-Employed Retirement 401k in the Business Section. Below is where I put the information. My problem is that it does not reflect what the Internet says I can contribute ($56,000+$6,000catch-up) and that any overage will have to be withdrawn or I will be penalized with a tax.

  1. Business
  2. Less Common business Situations
  3. Self-employment Retirement
    1. Self-employment Retirement Plan (yes) Individual 401k
    2. Elective Deferral = 19,000
    3. Catch-up = 6,000
    4. Max contribution to individual 401k (yes)
  4. A few slides later it says that 7302 is the amount to contribute by the plan due date which I assume is the tax filing date. HOWEVER, if any more than $19,000is put into the software then it says it has to be deducted before the due date.
  5. What is interesting is that the amount put into the self-employment Retirement Plan DOES NOT change the refund. I thought it would, but that is ok. What I am afraid of is that by not putting $59,500 in tax return I will have a penalty to pay the IRS.
  6. Please help me understand.
  7. Did I enter it in the wrong place?
  8.  Can I just move on or will I be penalized for not declaring the $59,500 401K?

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2 Replies
Level 15
Jun 12, 2020 10:58:11 AM

Did you have more than $62,000 in earned "taxable" income in 2019? My guess is, probably not. Whether you're permitted to contribute the maximum, though, is determined by your self-employment income.

 

 

Returning Member
Mar 27, 2022 3:08:08 PM

I’m searching the archives here to see if anyone is having this same issue with entering solo. 401k contributions and this is another post. Did you ever find a solution, I’m only realizing that turbo tax has been miscalculating my deduction for a few years now due ti what seems to be a glitch. My 401k contribution is not changing my tax due amount and I know I’m within my allowable contributions. And I’m using turbo tax to calculate the contributions for that matter with the “maximize” function. Anyone find a solution?