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Author: rosewine Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121061  
Subject: Solo 401K Date: 10/22/2013 11:12 AM
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I'm sure my question is answered somewher in the pubs, but I'm not finding it right now.

So, sole proprietor set up a Solo 401K and is making employer and employee contributions to the plan. Contributions are reported on his 1040 on line 28. So far so good. Is this both the contributions as employer and employee? I think so, but haven't been able to confirm.

Once I know this, then I have to figure it out on our new software which may be another challenge.
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Author: Wradical Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119380 of 121061
Subject: Re: Solo 401K Date: 10/22/2013 11:26 AM
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So, sole proprietor set up a Solo 401K and is making employer and employee contributions to the plan. Contributions are reported on his 1040 on line 28. So far so good. Is this both the contributions as employer and employee? I think so, but haven't been able to confirm.
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I've always assumed so, without thinking about it too deeply. I don't think you can deduct the "employee deferral" portion on Schedule C without messing up the SE Tax calculation. And 401K contributions are included in FICA wages or SE taxable income. So page 1 is the best place to deduct the whole contribution amount.

Bill

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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119381 of 121061
Subject: Re: Solo 401K Date: 10/22/2013 12:06 PM
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So, sole proprietor set up a Solo 401K and is making employer and employee contributions to the plan. Contributions are reported on his 1040 on line 28. So far so good. Is this both the contributions as employer and employee? I think so, but haven't been able to confirm.

I haven't gone back to look, but I use TurboTax, and I believe that the full contribution (employer and employee) for DH's solo 401k show up on that line.

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Author: rosewine Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119383 of 121061
Subject: Re: Solo 401K Date: 10/22/2013 1:20 PM
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Thanks. It make sense, but I've learned that very little about taxes it logical.

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119388 of 121061
Subject: Re: Solo 401K Date: 10/22/2013 2:24 PM
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From Pub 560

Deduct the contributions you make for your
common­law employees on your tax return. For
example, sole proprietors deduct them on
Schedule C (Form 1040), Profit or Loss From business....

Sole proprietors and partners deduct contri­
butions for themselves on line 28 of Form 1040,
U.S. Individual Income Tax Return.


The worksheet on p.22 shows how the salary deferral and profit sharing parts of a Solo 401(k) are combined and then subtracted on line 28.

http://www.irs.gov/pub/irs-pdf/p560.pdf

BruceM

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Author: rosewine Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 119391 of 121061
Subject: Re: Solo 401K Date: 10/22/2013 5:38 PM
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Thanks, Bruce. I didn't get far enough in the pub to see the worksheet. Trying to look for this along with prepping for the next Advanced Retirement Class at the same time didn't work as well as it should have.

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