I thought of one more Self-Directed Solo 401k question right after we got off the phone.
QUESTION 1: Regarding corporate structure… Do I understand correctly that the Self-Directed Solo 401kk can only be implemented by a company with ONE full-time employee (I am divorced and by myself in the company) but that I could hire part timers or contract out work as necessary without putting my 401k at risk?
ANSWER: Either both spouses or two business partners can participate in Self Directed Solo 401k. Further, part-time employees (those working less than 1,000 hours per year) may be excluded from the Solo 401k plan.
QUESTION 2: Does this mean that my LLC MUST BE a single member LLC to quality for Solo 401k?
ANSWER: That’s a good question. Logic tells me that if the other members are simply passive investors, you would be in compliance.
QUESTION 3: Does the tax status of my LLC (disregarded entity versus S-corp) have any bearing on how the Solo 401k is set up and managed? I know you can’t give me tax advice. I just need to know if the sole proprietor versus S-Corp changes the 401K in any way so I know to go do research on that topic.
ANSWER: No, entity type has no bearing with respect to managing Solo 401k. In other words, theSolo 401k rules apply the same whether the adopting employer is a sole proprietor or corporation, for example
Thanks so much. I look forward to doing business with you.
Best regards,
PM
