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April 1, 2022
Question

Keogh SEP and SIMPLE Contribution Worksheet is doubling my net earnings! My error or TurboTax?

  • April 1, 2022
  • 1 reply
  • 0 views

In Part III Step 1b of the contribution worksheet, the value for "Adjustment to Net Earnings" is showing the same amount as my Net Profit from self-employment, thereby doubling my total net profit which is incorrect. I am not sure why TurboTax is entering an adjustment in Part II table 1b for the same amount as my net profit.

 

I am contributing to a solo 401K plan with profit sharing at 25% and no employees or other income sources.

 

I have selected the "maximize my deduction" in the retirement contribution step-by-step section, and the result says I can contribute $64,500 to my solo 401K which I think is also wrong (too high). When I run the calculations in Excel using the IRS pub 560 Deduction Worksheet for Self-Employed and instructions, I get a much lower amount based on using only the net profit amount, not the double amount that TurboTax is coming up with.

1 reply

April 2, 2022

Adjustment to Net Earnings is a box in the self-employed retirement section. 

  1. Tap the Business tab
  2. On Let's gather your business info, find Less Common Business Situations
  3. Update Self-employed Retirement
  4. Say Yes on Self-Employed Retirement Plans
  5. Skip Individual and Roth 401(k) Plans
  6. Remove the amount on Adjusting Self-Employment Income
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