Setup a Solo 401k for a Pilates Instructor | W-4

QUESTION 1: I am considering changing my career path in the near future to become a Pilates instructor. If I were to do that, I would be employed at a studio that would not sponsor any kind of retirement plan. In that case, would I be eligible for a solo 401k?

ANSWER: If the Pilates company pays you as a contractor (1099 employee), then you would fall under the self-employed umbrella, so yes you would qualify to open a solo 401k.

QUESTION 2: Thank you for getting back to me, Mark. The company would actually be paying me as a W4 employee. Would I still be eligible?

ANSWER: W-4 is used by an employer to withhold taxes from an employee’s paycheck. Further, a W-4 is often associated with someone who is a W-2 employee, so I don’t think you qualify if that is the case.

In order to qualify, you will need to be a 1099 employee or start your business such as a sole proprietorship.

Thank you for the information!

JL in New Jersey

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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