Self-Employed Solo 401k for husband and wife

QUESTION: If I were to set up the self—employed solo 401k plan as an individual doing business as myself, to use for my 1099 and K1 income I earn, would my wife be able to do the same for income she receives from other 1099s and K1s using the same plan, or would we need to set up a new entity (like an LLC) in order to share the 401k?

ANSWER: Your wife would need to set-up a separate solo 401k plan because she generates her self-employment income from self-employed businesses not related to you.

Thanks John in Colorado


QUESTION: Spouse participation. My wife has started actively participating in the business, but we have not yet paid her via 1099, set her up as a W-2 employee, or made her a partner. However, one of those three is a very likely possibility in the very near future. Does her being the spouse of someone with a Solo 401k enable her to, for example, roll her IRA into my Solo 401k? Or would she need to be actually paid for her services or made a partner to participate in my solo 401k? Or… would she be setting up her own separate Solo 401k account?

ANSWER: Your spouse would need to be reporting self-employment activity in order to be eligible to participate, rollover funds, 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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