QUESTION:
If I wish to deposit personal funds into my 401k account at a later time, will that be permitted? Would it work the same way if I want to deposit earned revenue from my business as well?
RESPONSE:
While the ROBS 401k owner may make contributions to the ROBS 401k based on reasonable w-2 wages from the ROBS C-corp (and subject to the 401k contribution limits, deadlines, etc.), the plan would first need to be converted to a safe harbor plan to avoid violating top-heavy testing. See more HERE.
All of the revenue generated by the ROBS 401k-funded business will simply flow in and out of the corporation’s business account. If at the end of the year after the company has paid expenses & taxes, the company has earned an after-tax profit the company could decide to distribute that profit to the owners. In that case, the company would pay out dividends (profit) to the stockholders in which case it must pay all stockholders dividends in accordance with the ownership percentages. For example, if you and the 401k both own stock in the ROBS-funded corporation, and the corporation decided to process a dividend payment, both parties would receive dividends. See more HERE.
