2023 Home & Bus - Limits to Keogh/SEP Wks

Forum|Forum|2 years ago
March 28, 2024
1 reply
0 views

My wife is a very hard worker: she has W-2 income and also files a Sch C. On her W-2s she had in Box 12, retirement plan elective deferrals (Simple IRA) contributions of $15,600 (her age is over 50, so with catch-up contributions, she is below the annual limit for Simple IRA employee elective contributions.) She also has a Solo/Single 401(k) plan in place to help defer some of her Sch C income. In 2023, the maximum deferred elective contributions across all plans is $22,500 + $7500 (catchup) or $30,000. I noticed that TurboTax's Keogh/SEP worksheet does not alert users if elective contributions exceed the maximum across all plans, so users have to make sure they don't exceed the maximum themselves.

I think I'm correct that my wife's maximum elective contributions to the 401(k) plan would be: $30,000 - $15,600 or $14,400. Would anyone else care to clarify or correct what I've written here?

TurboTax Home & Biz Windows

Best answer by dmertz

You are correct, you cannot use the Maximize function in TurboTax for your wife's solo 401(k) contribution if she also made elective deferrals to another employer's plan. You have correctly calculated her maximum elective deferral to the Solo 401(k) plan. After entering the $14,400 as the elective deferral to the solo 401(k), you can use the Maximize function for a SEP plan to calculate the maximum employer contribution to the solo 401(k).