The Money Mustache Community
Learning, Sharing, and Teaching => Taxes => Topic started by: leevs11 on March 04, 2024, 02:44:10 PM
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Ok this is a very specific tax return question related to using the H&R Block tax filing tool.
I have a solo 401k and need to report the contributions. I cannot find a place to enter this in the H&R Block software. Has anyone else had any luck with this?
I tried entering it under business expenses, but that seems to only calculate the amount that would be related to the employer contribution, not employee. Ex it's applying the 25% of profit calculation to the contribution.
Any help would be appreciated!
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I don't know your tax software. On the paper forms this amount goes on Schedule 1 (https://www.irs.gov/pub/irs-pdf/f1040s1.pdf), line 16, labeled "self-employed SEP, SIMPLE, and qualified plans." Maybe a search for that terminology would be helpful?
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I don't know your tax software. On the paper forms this amount goes on Schedule 1 (https://www.irs.gov/pub/irs-pdf/f1040s1.pdf), line 16, labeled "self-employed SEP, SIMPLE, and qualified plans." Maybe a search for that terminology would be helpful?
That's the strange thing, it's putting that amount there, but is calculating it as 25% of the profit, not the full contribution amount.
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Sometimes they're referred to as Keogh plans in tax software, I don't really know why.
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From the top, "Take me to," then "Adjustments," which is the main category after "Income," and then "Keogh, SIMPLE, and SEP Contributions."
Take me to --> Adjustments --> Keogh, SIMPLE, and SEP Contributions
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I am a CPA. There are two sides of a solo 401k, the employee portion and the employer portion. The employee portion must be run through your W-2 with the payroll provider you are using. This must be done during the tax year. The employer portion is the other side which can be 25% of your W-2 wages. This amount can be determined after the tax year.
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I am a CPA. There are two sides of a solo 401k, the employee portion and the employer portion. The employee portion must be run through your W-2 with the payroll provider you are using. This must be done during the tax year. The employer portion is the other side which can be 25% of your W-2 wages. This amount can be determined after the tax year.
... if you're taxed as an s-corp, not a sole proprietor.
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I am a CPA. There are two sides of a solo 401k, the employee portion and the employer portion. The employee portion must be run through your W-2 with the payroll provider you are using. This must be done during the tax year. The employer portion is the other side which can be 25% of your W-2 wages. This amount can be determined after the tax year.
... if you're taxed as an s-corp, not a sole proprietor.
Correct, I am assuming he is asking as an S Corp since he is an employee since he mentioned employee contribution. He would not be an employee if taxed as Schedule C or Partnership so you would only be eligible for the employer contribution.
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While you may be correct that elective contributions aren't technically employee contributions for a sole proprietor, they're frequently referred to as such, including in solo 401(k) plan literature. Either way, a sole proprietor is able to make both "employee"/elective deferrals and employer nonelective contributions.
Actually, looking into this further, even the IRS refers to these as employee deferrals (https://www.irs.gov/publications/p560#en_US_2022_publink100035144).
Elective deferral. An elective deferral is the contribution made by employees to a qualified retirement plan.
- Non-owner employees: The employee salary reduction/elective deferral contributions must be elected/made by the end of the tax year and deposited into the employee’s plan account within 7 business days (safe harbor) and no later than 15 days.
- Owner/employees: The employee deferrals must be elected by the end of the tax year and can then be made by the tax return filing deadline, including extensions.