Self-directed Solo 401k Question – Is a Form 1099-R Required for Voluntary After-Tax Solo 401k Contributions?

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QUESTION: Is a Form 1099-R Required for Voluntary After-Tax Self-directed Solo 401k Contributions?

The answer is no because the voluntary after-tax Solo 401k contribution itself is not reportable.

For example, if the self-employed business is taxed as a sole proprietorship or partnership, there’s no place to report those voluntary after-tax contributions like there would be if you’re making a pretax contribution to reduce your taxable income.

If your business is taxed as an S-corporation the contribution is not an employer contribution so it is not reportable on the S-corp tax return (1120-S).

While a voluntary after-tax Solo 401k contribution is an employee contribution, the W-2 instructions are clear that reporting of voluntary after-tax contributions is optional.

Keep in mind that the subsequent transfer from the subaccount for voluntary after-tax contributions to a Roth solo 401(k) subaccount or a Roth IRA is reportable on a 1099-R.

Moreover, we handle the required 1099-R reporting as part of our service for no additional charge.

Our clients simply let us know about the transfer by completing the applicable online form (which is available 24/7).

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About George Blower

I have the privilege of educating our clients about our products and services so that they can make informed and confident decisions about their financial future. Prior to joining My Solo 401k Financial, I served as the general counsel for a subsidiary of a Fortune 500 financial services company. Learn more about George Blower and My Solo 401k Financial >>

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