Documenting Solo 401k Contributions

QUESTION 1: I am planning on faxing all of my Solo 401k plan establishment documents back to you in the next 24 hours. I found them to be easy to fill out and straightforward thanks to your concise directions! I don't intend to fund the Solo 401k plan until December when I get a feel for how much income will be available.

ANSWER: Since you executed the Solo 401k establishment documents before the 12/31 deadline, pursuant to IRS regulations you have until your file your business tax return in 2013 plus extensions to make your 2012 tax year Solo 401k contributions.

QUESTION 2: My main question involves the initial $17K in deferred income contribution to Solo 401k. Do I have to "run" this contribution through a payroll (which I don't currently have established) or can it come straight from my business checking account? I currently am an LLC reporting as an "S" Corp.

ANSWER: No you do not have to run Solo 401k contributions through payroll. Most self-employed individuals run their Solo 401k contributions from their business checking account to the Solo 401k checking account. The important item is to base the Solo 401k contribution on your self-employment compensation and that you don't exceed the annual Solo 401k contribution limits. You can easily calculate your 2012 Solo 401k contribution by clicking on Solo 401k Contribution Calculator located on our website and following the easy instructions. Also, as your Solo 401k provider you can call us anytime and we will run the calculation for you.

Please also click on Solo 401k forms to access our Solo 401k annual contribution from which should be used to document your Solo 401k contributions. This form is for your records. Further, when making Solo 401k contribution to the Solo 401k checking account, make the check payable in the name of your Solo 401k, and write "Solo 401k Annual Contribution" on the memo section of the check(s). I also recommend that you make copy of your Solo 401k contribution check(s) and file them with your Solo 401k contribution form(s). Remember that you are the Trustee of the Solo 401k and thus responsible for keeping precise records, especially in the event of an IRS audit.