I have three schedule Cs. They are all solo but separate.
There are, therefore, 3 line 31s which have these rounded numbers: 25,000, 18,000 and -12,000 (a negative number). Do I simply add them together and then use the solo 401k contribution calculator to subtract ½ self-employment-tax from the sum of the three (including the negative number) or treat them separately?
The one solo Section C business that has a negative value may be better to not include. If we use the business with lines 31: +25,000 and + 18,000 then the contribution can be up to 43,000 (minus ½ Social Security tax). But if we must include the business with a negative value on its line 31 then the maximum would only be 43,000 -12,000 = 31,000. Do we have to include all of them?
ANSWER:
Yes you can aggregate from all sources of self-employment income for purposes of making annual solo contributions to the Solo 401k. Please see the following link for more information: https://www.mysolo401k.net/aggregate-from-multiple-sources-of-self-employment-income-for-making-self-directed-solo-401k-contributions/
Per the IRC 415 limit, earned income for the self-employed individual is based on the sum of the earned income from all the controlled trades or businesses, regardless of whether the related employer maintains a qualified plan [Reg. 1.415-2(d)(6)].
As such, you will need to aggregate from all sources of income (including the negative value) which is $31,000.
