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I have been doing contract work and receiving checks made out to me personally, which will be reported on a 1099.

I also just formed an S Corp for future employment to get some of the benefits there.

I opened a solo 401(k) with eTrade so that I would be able to put these 1099 earnings into it. eTrade required an EIN number for the 401(k), and so I used the EIN of my S Corp.

Now, here is the confusion – can I use my 1099 earnings to contribute to this 401(k) plan, which is now associated with my sole member S Corp? Or do I have to do something silly like create yet another solo 401(k), with another EIN, which is associated with a sole proprietorship, since my 1099 income was paid to me directly and not to my corp?

Hoping the tax gods allow for common sense on this one. Thanks!

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Hoping the tax gods allow for common sense on this one.

Why would you hope that?

401k is per employer, even Solo 401k. So your S-Corp and your Schedule C, being different employers, will have different 401k plans. The limits shared though, since the employers are affiliated, so you need to be careful how much you contribute to each.

See 26 CFR 1.401-10 (b)(2).

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  • Thanks for this, but since my S-Corp is technically the same one-person "trade or business" that I currently run as a sole proprietor, couldn't my Solo 401k be considered to have been established for both of them, since they are the same business? I could understand if one job was consulting and another was landscaping, but that's not the case here. I'm just incorporating the same business which was previously a sole proprietorship.
    – number41
    Oct 20, 2022 at 4:14
  • So if I use those 1099 earnings to determine my current 401k contributions, am I going to get slapped on the wrist somehow and forced to take that money out of the 401k, when that 401k was created precisely for that same business?
    – number41
    Oct 20, 2022 at 4:29
  • @number41 your S-Corp is a separate entity from yourself, it has its own identity. While yourself and the S-Corp are affiliated (i.e.: share ownership and as such share limits), you're not the same.
    – littleadv
    Oct 20, 2022 at 15:30

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