Solo 401(k) and health insurance premiums

[Guest BruceC]

I've got a 45 year old single client who does some 'moonlighting' and made about $20,000 in 2010. Through his 'regular job' he earned about $90,000 but his cost in his group health plan is so costly that he elected to take cash from his employer and has purchased his own HDHP within his HSA. Lets say for simplicity his annual HDHP premiums are $2,000. Through his employer's 401(k) plan, he currently contributes 5% of his salary, or about $4,000.

What would be the maximum contribution he could make to his solo-401(k) for 2010?

Here is my calculation:

Maximum salary deferral: 16,500 - 4,000 = 12,500

Maximum profit share:

SE tax: (106,800 - 90,000) = 16,800 subject to OASD, 20,000 subject to HI. So (16,800 * .9235 * .124) + (20,000 * .9235 * .029) = 2,459.47 SE tax, divided by 2 = 1,229.73

SE income = 20,000 - 1,229.73 = 18,770.27

Profit share max: .2 * 18,770.27 = 3,754.05

Total max solo 401(k) contribution: 12,500 + 3,754.05 = 16,254

So, a couple of questions:

1. Did I do this right?

2. How, if at all, would his deductible health insurance premium and HSA contributions be used in calculating his maximum solo-401(k) contribution?

Thanks for any assistance

BruceM