Set up a Solo K

I have been considering setting up a Solo K for a while and am ready now to open one.

The circumstances are:

My wife and I work together.  I am currently a sole prop but I am getting ready to set up an S-corp.  Will be submitting paperwork for S Corp within the next week or so.  We do not currently have any employees and do not expect to hire any employees any time soon.

QUESTION: Can I go ahead and set-up the solo k now for the S-corp?

ANSWER: Yes you can go ahead and set-up a solo K for the S-Corp now since you are already self-employed through a sole proprietorship. In other words, you have already been performing self-employment work, which is the primary requirement for opening a solo k and, thus, meet the solo k establishment requirement.

We will each be rolling some funds from prior 401K’s over to initially fund the solo k.

Other questions – Are the steps to get this thing set-up:

QUESTION: I go ahead and get EIN?  Does the name have to be a certain way?

ANSWER: Correct—the first step in the solo k opening process is to obtain an EIN for the solo 401k specifically. Click here to for IRS EIN link as well as guidelines for obtaining the solo 401k EIN.

QUESTION: Existing IRA’s and 401K’s – Do I provide info on them and you get them rolled over?

ANSWER: We will prepare the IRA transfer form; however, the firm holding the existing 401k will most likely require that you fill out their transfer-out forms. We can assist you in filling out the 401k transfer out forms once you obtain them.

QUESTION: Provide the Company name and company type – If I am setting up a new Scorp, the legal name that it will be?

ANSWER: Since you are in the process of registering the S-Crop, provide the S-Corp name.

QUESTION: More or less that is the bulk?

ANSWER: Exactly—and visit solo 401k sign up to complete the solo k setup process. We will then establish the solo K in 24 hours and e-mail the solo 401k documents the next day.

Please let me know so I can move forward.

Michael CPA in California

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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