Can I Open Multiple Solo 401k Plans?

 

Hello, A few of questions regarding the Solo 401K:

QUESTION: I have multiple businesses with no employees, s-corp and llc's, would I be able to open a Solo 401k for each?

ANSWER: Yes the Solo 401k rules permit the establishment of separate Solo 401k for each self-employed business; however, you cannot exceed the annual-maximum contribution limit between all Solo 401k plans. For example, the maximum Solo 401k contribution limit for tax year 2012 is $50,000 plus $5,500 for those age 50 or older, so if you opened a separate Solo 401k plan for let’s say two self-employed businesses, the Solo 401k contribution rules restrict you to only contributing $50,00 to both combined Solo 401k plans combined.

QUESTION: I have a 401k that has pre-tax, after-tax and rolled-over funds. Can I designate that all pre-tax go to a Solo 401k and leave the post-tax behind and/or put the after-tax into a
separate Solo 401k or account?

ANSWER: You would need to setup multiple checking accounts/brokerage accounts for the Solo 401k plan to distinguish after tax vs pre-tax and rollovers. The first sub-account would house the after tax 401k contributions and the second sub-account would hold the pret-tax and rolled-over funds.

QUESTION: I had a SEP over a year ago, when I 100% rolled it into the above mentioned 401k, any issues there?

ANSWER: The SEP IRA would qualified to be directly rolled over to Solo 401k as the rollover rules allow for the transfer/rollover of SEP IRA to Solo 401k. The only type of IRA that cannot be rolled over to Solo 401k is Roth IRA. Lastly, SIMPLE IRA can be rolled over to Solo 401k but only after a 2 year waiting window has been met.


Thanks for your rapid response.