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.
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