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February 13, 2025
Question

I contributed $23K to my solo 401k as employee and will contribute $12K as an employer based on TurboTax's calculation but when I input that, it taxes owed doesn't lower?

  • February 13, 2025
  • 1 reply
  • 0 views
I'm in the section where TurboTax asks you for Self Employed Retirement Plans if I contributed to a traditional individual 401k plan. I selected yes. I put $23K into elective deferrals since that's what I contributed as an employee and now would like to max out the employer's side which is 20% of net income I believe. Turbo tax has a button I can click for them to calculate what the max contribution I can make is which comes out to a little over $12K. How come now when I add that 12K to the "employer matching (profit sharing) contributions" box, it doesn't lower my taxes owed at all? This should bring it down no?

    1 reply

    Employee
    February 13, 2025

    Examine TurboTax's Keogh, SEP and SIMPLE Contribution Worksheet to see the calculation of the deductible amount.  Examine Form 1040 to see how the above-the-line deductions from Schedule 1, including the self-employed retirement deduction, are affecting your taxable income with and without the employer contribution.

    j8yceyAuthor
    February 15, 2025

    I'm contributing to a solo 401k though. Is that a different form? Where can I find this form?

    KrisD15
    February 15, 2025

    To clarify, what type of tax entity are you? S-Corp, Sole-proprietorship (schedule C) ?

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