Any idea how this would interact with a solo 401k? Would the contribution calculations remain the same, or would the deduction have to somehow be accounted for?
According to the
Kitces article about the "final" text of the bill (assuming Trump signs it) the pass-through deduction is a below the line deduction on form 1040, which means it's not on schedule C, which is where net profit comes from for the publication 560 worksheet calculation of the solo 401k contribution amount, so it seems like that means it shouldn't factor in? Although, I guess the reduction of the contribution for 1/2 of self employment taxes is also on the 1040, but is integrated into the publication 560 worksheet, so maybe the same will happen with the pass through deduction?
So, say I'm a sole proprietor with $30,000 net profit, married filing jointly with a total taxable income less than the $315k limit, so nothing "strange" happens to the pass through deduction. Does this mean I could deduct $23,191 for the solo 401k contribution ($18.5k employee, $4,691 employer profit share), $2,295 for the employer half of self employment taxes, and $6000 for the 20% pass through deduction, resulting in a total of $31,486 in deductions, or $1,486 more than I made in the business resulting in the business actually reducing the tax paid on other income?