Question about increased 401k contribution due to disallowed deduction (Sole Proprietorship)

Jan 16, 2011 1 Replies

In case a business expense deduction is disallowed as a result of an audit, adjusted gross income will increase, and the maximum allowable



401k contribution will increase as well. Will the IRS allow the taxpayer to contribute additional amount to the 401k, in case a deduction is disallowed.

No, because the contribution must be made in that year.

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