Multiple Solo 401k contribution Sources

QUESTION: I have a quick question.  I’m operating a C Corp small business, but I expect to receive income from multiple sources such as other employers.

Should I consider setting up my Solo 401k as a sole proprietor under
my own name, so that all income sources can be used for plan
contributions?

Thanks, JP

ANSWER: As detailed in IRS Publication 560, you can make contributions on behalf of yourself only if you have net earnings (compensation) from self-employment. The solo 401k rules allow for contributions to a solo 401k plan from multiple sources of net self-employment income up to the annual solo 401k contribution limit.

Lastly, the Solo 401k rules prohibit contributions of income earned from your full-time employer unless you are an independent contractor receiving 1099 income, which would afford you option to open a Solo 401k plan.

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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