Can a Sole Proprietor/Single Member LLC/1099-NEC Independent Contractors set up a plan in 2024 and make Solo 401k contributions for 2023?

March 13, 2024 | By George Blower

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As a sole proprietor, you have the flexibility to establish a Solo 401(k) plan to save for retirement and potentially reduce your tax liability. But what if you didn’t set up your plan by the end of 2023? Can you still establish a plan in 2024 and make contributions for the 2023 tax year? The answer is yes, but with some important limitations. In this blog post, we’ll explore the rules and deadlines for setting up a Solo 401(k) in 2024 and making contributions for 2023.

Frequently Asked Questions:

Can I set up a Solo 401(k) plan in 2024 and make contributions for 2023? Yes, you can establish a Solo 401(k) plan in 2024 and make certain types of contributions for the 2023 tax year, provided you meet the deadlines and requirements.
What is the deadline to set up a Solo 401(k) plan in 2024 and make 2023 contributions? To make all types of contributions (employee, employer, and voluntary after-tax) for 2023, you must set up your Solo 401(k) plan including opening the accounts and depositing the contributions by April 15, 2024. If you file a timely extension for your 1040, you can set up the plan after April 15th, but you’ll only be able to make employer or voluntary after-tax contributions until October 15, 2024.
What types of contributions can I make for 2023 if I set up my plan in 2024? If you set up your Solo 401(k) plan by April 15, 2024, you can make employee, employer, and voluntary after-tax contributions for 2023. If you set up the plan after April 15th but before October 15th (with a timely filed extension), you can only make employer and voluntary after-tax contributions for 2023.

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