Turbo tax online shows that my contribution to the self-employment solo 401k can be as much as $30,500. But when I entered $30,000, it keeps saying that it cannot be more than $7000. I'm using TurboTax Preminum 2024.
Please advise.
Contributions are limited to the lesser of the allowed amount or 100% of a participant's compensation for the year. Your income changes when you deduct the amounts into the plan. If you have $30k income and then pay $30k into plan, it is subtracted from your income, then you have no income. You have to find the sweet spot for you to have income and deduct the business contributions.
For example: Your ROTH plus your Solo 401k must be less than or equal to your employee compensation.
Reference: Retirement contributions limit
The $7,000 limit sound like you are trying to enter your contributions as an IRA.
A Solo 410k is NOT an IRA, and is entered somewhere in the Business income and expenses section (I think)....but others are more knowledgeable about where a Solo 401k contribution is entered.