Thanks to everyone for their replies.+1 to advice to prioritize deductible TIRA deductions over deductible Solo 401k contributions as the former does not affect the QBI (qualified business income) deduction for self-employed businesses, if eligible.
Deductible pretax TIRA and Solo 401k contributions both reduce your Form 1040 AGI (adjusted gross income) which in turn increases ACA premium tax credits (PTC) (which are based on ACA modified AGI). But if you are also taking a self-employed healthcare deduction (SEHD), again prioritize the IRA contributions if your net business earnings/Solo 401k contributions will limit your SEHD.
The interplay among retirement contributions, ACA PTC, QBI deduction and SEHD can be complicated. I find it best to model these in tax prep software when deciding how to optimize these especially if self-employed income is say <$50k.
HomeStretch, is there a tax prep software you are aware of that does this particularly well?
Statistics: Posted by Infomom2 — Wed Dec 25, 2024 1:12 pm
