Solo 401k

2019 Solo 401k Contributions Plus Voluntary After-Tax

General Information regarding Solo 401k Contributions: Solo 401k contributions are based net- income from self-employment (i.e. you can’t contribute more than you make). You can make the contributions from your business or personal checking account as long as the funds stem from self-employment income. The total contribution limit for tax year 2019 is $56,000 plus an additional $6,000 catch up if age 50 or older. For 2018, the total contribution limit was $55,000 or $61,000 if […]

Full Comparison of Retirement Accounts (Solo 401k, SEP IRA and SIMPLE IRA) for the Self-Employed

Retirement accounts such as the solo 401k plan, SEP IRA and SIMPLE IRA are popular choices for the self-employed because they are inexpensive to establish, maintain and minimum IRS reporting applies. While businesses structured as  sole proprietorships, partnerships and corporations can qualify to open all three types of retirement accounts (i.e., solo 401k, SEP and […]

Solo 401k Contribution Eligibility vs. Destructibility Differences

From a contribution side, the self-employed primarily establish a solo 401k plan to make tax-deductible contributions. If not eligible for the tax deduction, they decide not to contribute to the plan at all. This is often the case because they are not aware the contribution can still be made just not deducted. The deduction eligibility […]

The Right Way to Establish a Solo 401k Plan

On the surface, establishing a solo 401k plan may seem like a fairly simple process, but it can be easy to skip a step. Overlooking any steps may cause the solo 401k plan to be out of compliance, resulting in no longer considered a tax shelter vehicle. Make Sure You Qualify While your solo 401k […]

Retirement Plan Participants Stayed the Course During 2018

Even though the markets were up and down throughout 2018, the ICI defined contribution plan recordkeeper data shows participants stayed the course by continuing to make annual contributions. The data looks at a number of items such as contributions, distributions and various activity draw from defined contribution recordkeeper data covering 30 million plus participant accounts […]

Number of 401(k) Millionaires Up End of 2018

According to a Fidelity Investments analysis of over 30 million retirement accounts, the number of 401k millionaires increased by 34% to $133,000 since the end of 2018. The number of IRA millionaires also increased from 138,800 to 168,100 in the 4th quarter of 2018. Following are some other key items from the quarterly analysis: Balances […]

Partial In-Plan Roth Solo 401k Conversion of Real Estate Held in Pretax Solo 401k Account

If you solo 401k plan allows for Roth solo 401k designated account funds, physical real estate held in the pretax solo 401k holding account can be fully or partially converted in-kind to the Roth solo 401k designated holding account. In this blog post we will discuss the logistics and rules for processing partial in-plan conversions […]

Tastyworks Solo 401k Trust

With a self-directed solo 4o1k from My Solo 401k Financial,  Tastyworks can open a holding account. When you get started with Tastyworks online application, make sure you select Trust and Cash account. Make sure to provide the name of the solo 401k plan that you opened through My Solo 401k Financial and also provide the employer identification (EIN) for […]

Foreign Person Tax Rules Apply to Solo 401k Distributions

After meeting certain distribution triggering events(e.g., age 59 1/2, no longer being self-employed), U.S. income taxes still apply if you live abroad and take solo 401k distributions.  The required mandatory federal tax withholding jumps from 20% to 30% . You may get some of the withholding back if a more favorable tax rate applies according […]

DOL Opinion Letter Helps Determine if Independent Contractor Status of Virtual Marketplace Workers Can Open a Solo 401k Plan

Solo 401k plans are for the self-employed including independent contractors. The Department of Labor (DOL) recently released opinion letter (FSLA2019-6) that sheds light on who is considered an independent contractor (e.g., drivers for Uber and Lyft transportation services) in the  “virtual marketplace” economy. The DOL letter specifically answers  whether service providers working for a virtual marketplace […]

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