Cryptocurrency Mining as Self-Employment Income Form 1099-NEC For Solo 401k Eligibility and Contribution Purposes

The IRS requirement to open and to continue with a self-directed solo 401k, which is a type of defined contribution plan for the owner-only businesses, is the performance of material services which results in self-employment income.

In the context of qualifying for opening a solo 401k through the mining of cryptocurrency, which is reported on Form 1099-NEC, the individual can open a solo 401k as long as she performs material services, the mining of the cryptocurrency is done outside of the retirement account, and treats the activity as earned income.

Various IRS forms or schedules are used to determine whether a self-employed person has net business income. Sole proprietors (one person owns all of the business) use Schedule C, Profit or Loss from Business.
Partnerships use Schedule K-1, Partner’s Share of Income, Deductions, Credits, etc.

About Mark Nolan

Each day I speak with energetic entrepreneurs looking to take the plunge into a new venture and small business owners eager to take control of their retirement savings. I am passionate about helping others find their financial independence. Having worked for over 20 years with some of the top retirement account custodian and insurance companies I have a deep and extensive knowledge of the complexities of self-directed 401ks and IRAs as well as retirement plan regulations. Learn more about Mark Nolan and My Solo 401k Financial >>

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