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Maximum allowable solo 401(k) deduction

To calculate the maximum allowable solo 401(k) deduction, enter
4
 in the
Compute maximum allowable contribution
 field. UltraTax CS automatically calculates the maximum deduction using the lesser of 20 percent (.25/1.25) of net earnings from self-employment or $53,000.
If the solo 401(k) plan includes provisions for elective deferrals, mark the
Include elective deferral in computing maximum allowable contribution
 field in the
Keogh
 screen. UltraTax CS assumes the maximum elective deferral amount of $19,000 for 2022 when calculating the maximum allowable contribution. UltraTax CS automatically reduces the $18,000 maximum by any contributions entered in the
W2
 screen or in a separate
Keogh
 screen made on behalf of the same individual.
Also, if the solo 401(k) participant qualifies to make catch-up contributions, mark the
Include catch-up contribution in computing maximum allowable contribution
 field in the
Keogh
 screen. With this field marked, UltraTax CS automatically calculates the maximum allowable catch-up contribution (if the participant is age 50 by the end of the calendar year) in addition to the elective solo 401(k) plan contribution. Catch-up contributions for all eligible solo 401(k) plans are limited to $6,000 for 2022.
In lieu of calculating the maximum allowable contribution, use the
Total 401(k) contributions
 field in the
Keogh
 screen to enter known contributions to the plan. The same limitations apply for the purposes of calculating the solo 401(k) plan deduction.
To adjust the amount of self-employment earnings UltraTax CS uses to calculate the self-employment deduction, enter an adjustment in the
Adjustment to earned income
 field in the
Keogh
 screen. Negative entries are treated as subtractions.

This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual
  • Subject: Retirement
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