I have a solo k as a sole proprietor (no LLC). From what I understand, the only taxes deferred are federal income tax. FICA taxes are still paid but my real question is are state income taxes deferred as well? I live in New York City and on my state return it dropped the FULL income of my business w/o taking into account the deferred contributions to my solo k (which federally is nearly all of my income). Am I really paying 10+ percent state tax on my solo k contributions and not getting a state income tax deferment as well as federal?
NY taxes distributions from a 401K like the feds so the state will not also tax the contributions following the feds. https://www.tax.ny.gov/pit/file/information_for_seniors.htm
Yes, money withdrawn from pensions and 401(k)s, 403(b)s and IRAs are combined and taxed as regular income. Tax rates run from 4 percent to 10.9 percent, just like for other income. But federal, New York state pensions and military retirement pay are tax-exempt. https://states.aarp.org/new-york/state-taxes-guide#:~:text=Yes%2C%20money%20withdrawn%20from%20pensi....
Hey I'm really sorry. This issue has had me frazzled for a few days now and I finally.made sense in my head. TurboTax accounts for the solo k and self employment tax on line 18 on the NYS return.
Still have questions?Make a post