Is the owner's own SEP-IRA or solo 401(k) contribution schedule 1 line 16 or line 19?

Line 19 holds only what the business contributed for employees, so a plan with no participant other than the owner produces no line 19 entry at all.

Is the owner's own SEP-IRA or solo 401(k) contribution schedule 1 line 16 or schedule 1 line 15?

Schedule 1 line 15 is the deductible part of self-employment tax, a separate automatic adjustment, while the retirement contribution has its own line at 16.

Schedule C Schedule 1 line 16: the owner's own SEP-IRA or solo

Short answer Schedule 1 line 16 Schedule 1 line 16, self-employed retirement plans

The owner's own SEP-IRA or solo 401(k) contribution belongs on Schedule 1 line 16, schedule 1 line 16, self-employed retirement plans.

Why schedule 1 line 16

This is the most common error on line 19. Line 19 is only for contributions the business makes for its employees, and a sole proprietor is not an employee of the business, so your own SEP-IRA, SIMPLE or solo 401(k) contribution never appears anywhere on Schedule C. It goes on Schedule 1 line 16 as the self-employed retirement plan deduction, which cuts income tax but not self-employment tax, because it is taken after net profit is already set. If you have no employees, as in a solo 401(k) with only you in it, line 19 is blank.

Log it once, with the line already on it. Type an expense in plain words in ClaryBook and it is filed with a date, vendor, amount and what it was for, so the number your preparer needs for the owner's own SEP-IRA or solo 401(k) contribution is already written down.

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What the owner's own SEP-IRA or solo 401(k) contribution is confused with

Line 19, pension and profit-sharing plans: Line 19 holds only what the business contributed for employees, so a plan with no participant other than the owner produces no line 19 entry at all.
Schedule 1 line 15, schedule 1 line 15, deductible part of self-employment tax: Schedule 1 line 15 is the deductible part of self-employment tax, a separate automatic adjustment, while the retirement contribution has its own line at 16.

Examples that belong on schedule 1 line 16

$12,000 contributed to your own SEP-IRA as a sole proprietor with no employees
$18,000 of deferral plus employer contribution into your own solo 401(k)
A catch up contribution for an owner aged 50 or over, still deducted on Schedule 1
$0 on line 19 for a one person business, with the whole contribution on Schedule 1 line 16

What does not belong here

Any part of the owner's own contribution on Schedule C line 19.
Treating the contribution as a reduction of net profit, which it is not, so self-employment tax is unchanged.
Deducting more than the plan limit, which is computed on net earnings from self-employment rather than on gross profit.

The limit that applies

The owner's deductible contribution is computed on net earnings from self-employment, which is net profit reduced by the deductible part of self-employment tax, so the plan percentage applies to a smaller base than net profit itself.

What to keep

Keep the plan document, the custodian's contribution confirmation with its date, and the worksheet showing how the deductible amount was computed from net earnings from self-employment. If the plan also covers employees, keep the split between their contributions and yours.

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Sources

This page explains how Schedule C lines work. It is general information, not tax advice for your situation. If an expense is large or the answer turns on a fact about your business, confirm it with your tax preparer.

Looking for a different expense? The full Schedule C line lookup has every line from 8 to 27 with the expenses that belong on each, and Schedule C expense categories walks the whole form in order.

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