After tax (Voluntary non-roth) to solo 401k

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
grouponde2000
Posts: 45
Joined: Sun Sep 13, 2020 11:00 pm

After tax (Voluntary non-roth) to solo 401k

Post by grouponde2000 »

Greetings!

Background: This is for a solo401k for my new consulting business. I have a W2 job where I make ~$165,000 (and I have already maxed out the regular 19,500 deferral and an additional ~20,000 in the after-tax bracket). I have maxed out on social security tax on (~$137,700 of W2 income).
Basically, I have not made (and cannot make) any elective deferral (traditional or Roth 401k contribution towards my solo401k - as all was made towards my W2 job).
I want to transfer the maximum possible 'after-tax-non-roth-voluntary contribution' towards my solo401k. I have completed my taxes and am am trying to see 'which number on line/form' can I actually transfer for my 'after-tax-non-roth-voluntary contribution'.

Question: For this year, looking at Schedule C: Line 1 (Total income) = 40,000; after that, expenses deducted...and Line 31 (Net Profit) is ~$26,000. This is the same number on Schedule 1 (line 9) that goes to my 1040. My SE tax is 700 (per turbotax). The number on line 13 (Schedule SE) or 'deduction for 1/2 of SE tax) is 350.

Is the "Total After-tax non-roth solo 401k contribution" = Line 31 (Schedule C) - Line 13 (Schedule SE)
Last edited by grouponde2000 on Tue May 04, 2021 12:41 pm, edited 1 time in total.
placeholder
Posts: 4583
Joined: Tue Aug 06, 2013 12:43 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by placeholder »

Are you asking about making after tax contributions to the i401k because most i401k plans don't allow that off the shelf.
Topic Author
grouponde2000
Posts: 45
Joined: Sun Sep 13, 2020 11:00 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by grouponde2000 »

placeholder wrote: Tue May 04, 2021 12:45 am Are you asking about making after tax contributions to the i401k because most i401k plans don't allow that off the shelf.
That is correct. My solo401k plan allows after-tax contributions.
HomeStretch
Posts: 6207
Joined: Thu Dec 27, 2018 3:06 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by HomeStretch »

The total Solo 401k contributions* cannot exceed your net business earning minus the employer share of self-employment taxes. The $26k per your post needs to be reduced by the employer share of self-employment taxes per Schedule SE/1040.

* employee elective deferral + employer match/profit share + after tax (non Roth) employee contribution
Topic Author
grouponde2000
Posts: 45
Joined: Sun Sep 13, 2020 11:00 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by grouponde2000 »

HomeStretch wrote: Tue May 04, 2021 9:40 am The total Solo 401k contributions* cannot exceed your net business earning minus the employer share of self-employment taxes. The $26k per your post needs to be reduced by the employer share of self-employment taxes per Schedule SE/1040.

* employee elective deferral + employer match/profit share + after tax (non Roth) employee contribution
For this year, looking at Schedule C (TurboTax) : Line 1 (Total income) = 40,000; after that, expenses deducted...and Line 31 (Net Profit) is ~$26,000. This is the same number on Schedule 1 (line 9) that goes to my 1040. My SE tax is 700 (per turbotax). The number on line 13 (Schedule SE) or 'deduction for 1/2 of SE tax) is 350.

QUestion: Is the "Total After-tax non-roth solo 401k contribution" = Line 31 (Schedule C) - Line 13 (Schedule SE). Is this THE formula? :)
HomeStretch
Posts: 6207
Joined: Thu Dec 27, 2018 3:06 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by HomeStretch »

grouponde2000 wrote: Tue May 04, 2021 12:41 pm QUestion: Is the "Total After-tax non-roth solo 401k contribution" = Line 31 (Schedule C) - Line 13 (Schedule SE). Is this THE formula? :)
That is it! $26,000 - 350 = $25,650 is your limit for all contributions.
placeholder
Posts: 4583
Joined: Tue Aug 06, 2013 12:43 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by placeholder »

grouponde2000 wrote: Tue May 04, 2021 9:26 am That is correct. My solo401k plan allows after-tax contributions.
It's usually a bit of a process to get a solo plan set up for that and I just want to make sure you did that so if you could mention the custodian and the steps you went through to get it set up that would be reassuring.
Topic Author
grouponde2000
Posts: 45
Joined: Sun Sep 13, 2020 11:00 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by grouponde2000 »

placeholder wrote: Tue May 04, 2021 8:10 pm
grouponde2000 wrote: Tue May 04, 2021 9:26 am That is correct. My solo401k plan allows after-tax contributions.
It's usually a bit of a process to get a solo plan set up for that and I just want to make sure you did that so if you could mention the custodian and the steps you went through to get it set up that would be reassuring.
Discount-solo-401k...they have the traditional, Roth and AFter-tax...and then registered with FIdelity.
placeholder
Posts: 4583
Joined: Tue Aug 06, 2013 12:43 pm

Re: After tax (Voluntary non-roth) to solo 401k

Post by placeholder »

Sounds good sorry for seeming too doubtful.
Post Reply