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2 replies

VolvoGirl
Employee
March 31, 2023
DawnC
Employee
March 31, 2023

As a self-employed business owner, you wear two hats in a 401(k) plan:  employee and employer.   Contributions can be made to the plan in both capacities.    An owner can contribute both:

 

  • Elective deferrals up to 100% of compensation (“earned income” in the case of a self-employed individual) up to the annual contribution limit:
    • $22,500 in 2023 ($20,500 in 2022; $19,500 in 2020 and 2021), or $30,000 in 2023 ($27,000 in 2022; $26,000 in 2020 and 2021) if age 50 or over; plus
  • Employer nonelective contributions up to:
    • 25% of compensation as defined by the plan, or
    • for self-employed individuals - This compensation doesn’t include retirement plan contributions or self-employment tax, which are deducted from your income.   TurboTax will make these calculations for you (or tell you if you contributed too much to your Solo 401(k)). 

 

How do I enter a Solo 401K contribution in TurboTax?

 

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