I need someone to review my numbers to understand what space I have available from the business income for making non-deductible contributions to my Individual 401k plan for the purposes of the megabackdoor roth rollover.
I’m going to use my 2016 income tax information so as to educate myself about what my potential is because my 2017 income will be roughly similar.
Sole Proprietor schedule C business income.
*Age is above 50 so I can do employee catch-up of $6,000 on top of the $18,000 max for salary deferral. The employer deduction is maxed out too.
"2016 Income tax statement"
Wages: 7,716
Interest Income: 1,067
Dividend Income: 14,448
Taxable refunds: 887
Business Income: 55,849
Capital Gain: 499
Total: 80,466
Deductions/Exemptions:
Health Savings Account: 3,350
Deductible Part of SE tax: 3,946
Qualified Plan/solo 401k*: 34,381
Health Insurance Deduction : 1,161
IRA Deduction: 6,500
Adjusted Gross Income: 31,128
Calculate how much is available for non-deductible contributions to my Solo 401k plan
Business Income: $55,849
Earned business deductions:
Deductible Part of SE tax: 3,946
Qualified Plan/solo 401k*: 34,381
Health Insurance Deduction : 1,161
Max non-deductible contribution: $16,361