solo 401k

[DavidAnnArbor]

The employee deduction, or elective deferral, gets deducted on line 28 of the 1040.  Where does the nonelective contribution or the employer contribution get deducted?  Same line on 1040, or on the Schedule C ?

[terran]

Taxact put both combined on line 28 for me.

[protostache]

The employee deduction, or elective deferral, gets deducted on line 28 of the 1040.  Where does the nonelective contribution or the employer contribution get deducted?  Same line on 1040, or on the Schedule C ?

When you're filing as a disregarded entity it all goes in on the same line on 1040. It's not deductible on Schedule C.

https://ttlc.intuit.com/questions/2754848-is-self-employed-401k-employer-match-amount-a-deductible-expense

[DavidAnnArbor]

Thank you

[protostache]

Thank you

No problem. If you were to set up an LLC and elect S-corp, then the amount would get deducted as an expense on 1120S and the math is quite a bit simpler, but that may be too much overhead for what you're doing.

[DavidAnnArbor]

Thanks the solo business income generates about $50,000 in profit according to the schedule C. It's definitely tempting to just pay myself a salary of $35K and save on payroll taxes on $15K, which would save me about $15,000 times 15.3%. I just don't know whether or not I should, or if I have to create my own payroll, or have to pay FUTA and SUTA, and a whole bunch of payroll stuff.
In Mr. Money Mustache's column, his business income is much higher, and I see why he saves quite a bit of money going down that road.

[protostache]

Thanks the solo business income generates about $50,000 in profit according to the schedule C. It's definitely tempting to just pay myself a salary of $35K and save on payroll taxes on $15K, which would save me about $15,000 times 15.3%. I just don't know whether or not I should, or if I have to create my own payroll, or have to pay FUTA and SUTA, and a whole bunch of payroll stuff.
In Mr. Money Mustache's column, his business income is much higher, and I see why he saves quite a bit of money going down that road.

Yep, looking at my last payroll I have to pay FUTA, Michigan State Unemployment, and a Michigan Obligation Assessment (yay Michigan) in addition to the employer share of Medicare and Social Security. I pay Gusto $29/mo to run all of this stuff because it's way too much tedious detail to maintain, when I could be selling those hours instead. That said, at $50k it's not worth it IMO. I paid about $900 to prepare the business taxes this year and that was with me providing the accountant a comprehensive P&L and our payroll journal to work from.