Definition of Independent Contractor

If you are an independent contractor, you are self-employed and thus qualify for a self-directed solo 401k plan. People such as doctors, dentists, veterinarians, lawyers, accountants, contractors, subcontractors, public stenographers, or auctioneers who are in an independent trade, business, or profession in which they offer their services to the general public are generally independent contractors. However, whether these people are independent contractors or employees depends on the facts in each case. The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done. The earnings of a person who is working as an independent contractor are subject to Self-Employment Tax.

You are not an independent contractor if you perform services that can be controlled by an employer (what will be done and how it will be done). This applies even if you are given freedom of action. What matters is that the employer has the legal right to control the details of how the services are performed.

If an employer-employee relationship exists (regardless of what the relationship is called), you are not an independent contractor and your earnings are generally not subject to self-employment tax.

Officiating QUESTION:

I would like to setup a Solo 401k related to my officiating. I would assume I qualify since I am an independent contractor, but I’m not sure? Obviously when I get paid for officiating, the check is made out to me personally. I assume this is not a problem?


Yes your officiating work qualifies you for a solo 401k as a solo 401k is for solo business owners including independent contractors (sole proprietors).

SOLO 401(K)