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April 20, 2023
Question

Conflict between Keogh/SEP Worksheet and Health LTC worksheet for Solo/Individual 401k contribution

  • April 20, 2023
  • 0 replies
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I am trying to figure out how much to contribute to a Solo/Individual 401k in connection with a Schedule C business (I have obtained an extension to file).  Checking the box on the Keogh/SEP worksheet for maximum contribution produces a result of about $19k and gives me the lowest tax liability.  However, if I enter that same amount on Line B of the Health LTC worksheet as the amount attributable to this business, my tax liability jumps up.  I have discovered that I can enter anything between "0" and about $10k on that line without affecting tax liability.  But if I uncheck the maximum contribution on the Keogh/SEP worksheet and keep the actual contribution at $10k, tax liability jumps up again.  This makes no sense to me.  Has anyone else faced or addressed this issue?