9 votes
Accepted

Can you really contribute over the 401k limit if you have a traditional 401k and a side-hustle?

Your total salary deferral cannot exceed $18K (as of 2016). You can split it between your different jobs as you want, to maximize the matching. You can contribute non-elective contribution on top of ...
littleadv's user avatar
  • 172k
8 votes
Accepted

Do you get any social security credits if you put 100% of your income in a 401(k)?

You'll need to pay self-employment tax, so you can't put all the $15K in 401k. Half of the SE tax is a deduction from your self-employment income (See the IRS website). Contributing to 401k plan only ...
littleadv's user avatar
  • 172k
7 votes

Is it possible to deposit stock into a Solo 401k?

No. This account, along with IRAs, can only take 'deposits' in cash. They may accept transfers from similar tax status accounts "in kind", e.g. I can transfer assets from my pre-tax IRA to my ...
JTP - Apologise to Monica's user avatar
5 votes
Accepted

Do I have to invest my Solo 401k contributions to take advantage of tax deferral

Is simply ... keeping it in cash balance enough to take advantage of tax deferral Yes, because the amount you contribute to the 401(k) is deducted from this year's income (EDIT: he didn't mention ...
RonJohn's user avatar
  • 50.7k
4 votes
Accepted

Solo 401k eligibility

You qualify, and there don't need to be any additional costs. There are special rules for solo 401(k) plans that allow sole proprietors to use them without being employed or messing with payroll. In ...
Ben Voigt's user avatar
  • 6,787
4 votes
Accepted

Avoiding self-employment tax and maximizing retirement contributions

SEP is limited to 25% of the profits, so if the LLC's profit is 200k, the max you can put into retirement is 50K. The word "makes" in your question is ambiguous, but lets assume that you mean profit. ...
Pete B.'s user avatar
  • 76.3k
4 votes
Accepted

Solo 401k and 25% profit contributions: Is this also a deduction against income?

Yes, they are deductible. The treatment is a little weird because of the self-employed nature. Profit Sharing contributions made to employees are deductible at the Employer level and are reported on ...
Chris's user avatar
  • 921
3 votes
Accepted

Contribution deadlines for Solo 401k as Single-Member LLC

As a self-employed individual reporting business income on Schedule C, you can disregard the instructions for W-2 employees, which would apply for Solo 401k participants who are paid a salary (i.e. S-...
Stan H's user avatar
  • 7,066
2 votes
Accepted

Can I use my Solo 401(k) to deduct my taxes from my W-2 earned income?

From your question it seems like you own the business and you W-2 yourself. Therefore any pre-tax employee contributions you might have already made (ie. employee deferrals) have already been deducted ...
Chris's user avatar
  • 921
2 votes

What dictates 401K loan interest rates?

The interest rate is determined by your 401(k) provider and your plan document. Of course you may be able to influence this, depending on your relationship with the provider. I'm very certain that ...
farnsy's user avatar
  • 15.1k
2 votes
Accepted

Can I rollover a traditional IRA into a self-employed 401k if the self-employed business had no income this year?

Limitations of money you earn only applies to contributions. Transfers, rollovers and conversions don't require income. Gap years are great times to do conversions etc. that may have tax consequences....
Harper - Reinstate Monica's user avatar
2 votes
Accepted

Am I still covered by my self-employed 401(k)?

From the IRS guidance on Are You Covered by an Employer's Retirement Plan? (bold emphasis mine): You’re covered by an employer retirement plan for a tax year if your employer (or your spouse’s ...
Spig's user avatar
  • 759
2 votes

Am I still covered by my self-employed 401(k)?

If it was me, I would work with the 401K provider and ask them if anything needs to be done formally. Also you can close the business. SBA link to closing a business. Once the business is closed ...
Pete B.'s user avatar
  • 76.3k
2 votes
Accepted

How do I manage 401K Contribution limits across multiple sources of income?

Employee traditional and Roth contributions are capped at 19.5k across all plans (assuming you're under 50 years old) Each plan's total employee (traditional, Roth, and after-tax) and employer ...
user106227's user avatar
2 votes

EIN Needed When Filing Form 5500-EZ For Solo 401K

An EIN is normally needed in order to contribute to a Solo 401K. You should double check that your application with TD Ameritrade was for a Solo 401K and not some other investment vehicle. If TD ...
farnsy's user avatar
  • 15.1k
2 votes
Accepted

How to rollover Solo Roth 401k to Roth IRA

You tell Vanguard you want to rollover Roth 401k into your Roth IRA, and they can tell you who the check should be made out to, what to write in the check memo, and where the check should be made out ...
user102008's user avatar
  • 17.1k
2 votes
Accepted

Solo 401k establishments costs - is it employer or employee?

Setting up a 401k plan for a business is a business expense. It doesn't matter how many employees there are.
littleadv's user avatar
  • 172k
2 votes

Solo 401k contribution limit for high Schedule K-1 income

Question 1: The employer contribution for an S-corp Solo 401k plan is based on W-2 compensation. K-1 distributions aren't included. So your 25% of W-2 wages calculation would be correct. Regarding the ...
Stan H's user avatar
  • 7,066
1 vote

Self-Employed near retirement needing to start a retirement account

Unfortunately, it is not a great situation for your father. The main benefit of retirement accounts is many years of tax-deferred growth. Since your father is close to retirement he's missed most of ...
minou's user avatar
  • 7,516
1 vote
Accepted

What are the penalties for mistakes in form 5500EZ

The IRS has details about the penalties and instructions for filing the form. From their website, "The penalties have been increased to $250 a day, up to a maximum penalty of $150,000 per plan ...
chill_vibes's user avatar
1 vote
Accepted

Reclassifying income from passive to active for actively managed rentals

My understanding is that this would reclassify the 10% management fee from passive rental income to active property management income. Is this accurate? If so, once it's active income I should ...
Hart CO's user avatar
  • 70.4k
1 vote

Reclassifying income from passive to active for actively managed rentals

I would only trust a tax accountant's answer on that one. It seems like it could go either way and may even change from year to year. LLCs organized as a sole proprietorship would be tricky in this ...
Pete B.'s user avatar
  • 76.3k
1 vote

maximum solo 401K contribution

If you contribute the complete amount to your 401k, you don't own taxes on it. As a result, you can claim back the taxes you already paid, in your annual tax-filing, and yes, you can put the complete ...
Aganju's user avatar
  • 37.7k
1 vote

Tax consequence of 100% profit deferral to solo 401k contribution

The self employment tax is before the 401k deduction. However, you mentioned this is your side job, but did not specify your income from you main job. The value of the tax savings from your deduction ...
TTT's user avatar
  • 47.2k
1 vote

From which bank account should I make employee contributions to my Self-Employed (Solo) 401k?

The account to or from which anything flows shouldn't matter for anything tax related. What matters is that it's correctly accounted for in the books. It's just generally easier to have a separation ...
xyious's user avatar
  • 2,778
1 vote

Is it possible to deposit stock into a Solo 401k?

The solo 401k can only receive cash deposits. If you want to transfer assets from your existing investment account you could consider 'directing' your dividend income to your Solo 401K and or sell ...
Unconstrained Education's user avatar
1 vote

Solo 401k eligibility

Consider a SEP IRA instead of a Solo 401k. SEP IRAs are quite a bit simpler to implement and give you essentially the same benefits as a Solo 401k. With a SEP IRA you can contribute about 20% of ...
minou's user avatar
  • 7,516
1 vote

Solo 401k eligibility

You qualify. However, fees may preclude you from doing so. There is an important distinction between yourself and the business. The business is being paid for 20 hours per week of work. That ...
Pete B.'s user avatar
  • 76.3k
1 vote

Paying my wife's LLC from my LLC and solo 401k contributions

I would say that it almost doesn't matter whether you could, you just shouldn't. It is the self-dealing prohibitions for qualified plans that have an issue here. Can you probably find a way to ...
CQM's user avatar
  • 20.2k
1 vote

Can a person running two (non-incorporated, sole-proprietor) businesses write off expenses from one and contribute to a solo 401k for the other?

for a sole proprietor, it doesn't matter how many clients the money comes from. The sole proprietor had (in your example) $10k in expenses and $20k in income, netting out $10k (after expenses). One ...
rocketman's user avatar
  • 907

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