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How do you move 100% revenue into a 401k to not pay fed or state taxes

Forum|Forum|2 years ago
December 4, 2023
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I am a sole proprietor and made 30K and want to move 100% into a 401k to not pay fed or state taxes, How do you do that in turbo tax? I cant find it.

TurboTax Home & Biz Windows

Best answer by dmertz

What tax year? If 2022, it's too late to contribute any of that to an individual 401(k).

Assuming that the $30,000 is the net profit determined on your 2023 Schedule C, In TurboTax under Business Deductions and Credits -> Self-employed retirement plans answer Yes that you contributed to an individual or Roth 401(k), then mark the box for Maximize Contribution to Individual 401(k). TurboTax will then calculate the maximum permissible contribution. The maximum contribution will depend on your age, but cannot be more than the $30,000 reduced by the deductible portion of self-employment taxes. If you are age 50 or over at the end of 2023, With $30,000 of net profit your maximum contribution will be $27,880 (assuming your self-employment tax is not limited by having a substantial amount of W-2 income).

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dmertzAnswer

What tax year? If 2022, it's too late to contribute any of that to an individual 401(k).

Assuming that the $30,000 is the net profit determined on your 2023 Schedule C, In TurboTax under Business Deductions and Credits -> Self-employed retirement plans answer Yes that you contributed to an individual or Roth 401(k), then mark the box for Maximize Contribution to Individual 401(k). TurboTax will then calculate the maximum permissible contribution. The maximum contribution will depend on your age, but cannot be more than the $30,000 reduced by the deductible portion of self-employment taxes. If you are age 50 or over at the end of 2023, With $30,000 of net profit your maximum contribution will be $27,880 (assuming your self-employment tax is not limited by having a substantial amount of W-2 income).