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
