QUESTIONS:
I hope all is well! I recently rejoined the government and will be contributing back into the TSP plan on a pre-tax basis. I wanted to see how this would impact my contributions (via my self-employed income) into my solo 401k account?
If I contribute the maximum amount into my TSP (pretax…$18,000) for 2017, what is the maximum I can contribute into my solo401k?
ANSWER:
Employee contributions are aggregated between TSP accounts and solo 401k plans. As such, once you max out the employee contributions to your TSP for tax year 2017, you cannot make employee contributions to the solo 401k plan. The employee contribution aggregation rules fall under IRC 402(g).
QUESTION:
For 2016, if I contributed $25,000 into my solo 401k account, what is the maximum I can contribute into my TSP (all accounts are pre-tax)?
ANSWER:
If for 2016 you treat the $25,000 as a solo 401k profit sharing contribution, assuming you have enough net-self-employment income to do so, then you will be able to make the full $18,000 employee contribution to the TSP account. Reason being, profit sharing contributions are not aggregated between solo 401k plans and TSP accounts like employee contributions are.
QUESTION:
Lastly, would it make a difference in terms of max contribution to my solo 401k if I elected to contribute into the TSP on an after-tax basis?
ANSWER:
No because Roth solo 401k and Roth TSP account contributions both fall under the employee contribution umbrella not the employer profit sharing umbrella.
Thank you so much for everything!!
