I work a part-time job. Do I have to have a business to open a solo401k?
ANSWER:
If you are self-employed (i.e. you are reporting active self-employment income on your taxes earned from your personal effort such as income reported on schedule C and not income reported on schedule E) with no full-time W-2 employees working for you, you can set up our solo 401(k) plan. In fact, you don’t need to set up an LLC or other legal entity as you could simply be a sole proprietor and set up a Solo 401k. The key is that you are engaged in some type of self-employment activity such as providing goods or services & reporting this activity on your taxes.
Seasonal Help
Also, if you perform contracting work for a business on a seasonal basis, that is also considered earned income from self-employment which would afford you to participate in your own solo 401k plan. Businesses often need to hire independent contractors on a seasonal or part-time basis. Businesses often need seasonal help for delivering goods, designing a website, performing repairs, preparing tax returns, etc.
