BACKGROUND: Until
year 2012 I had a long-standing Keogh account, but closed it in December of
2012.
March 2013 I contributed $20,000 to
my solo 401k (Roth) checkbook control
account with Fidelity (which you helped me set up). Same month I invested that
money in a fund.
QUESTION: I believe that because of my Keogh account I am not
allowed to apply that contribution to year 2012, but instead must apply it
to year 2013. Is this correct?
ANSWER: First, I’m not sure how you will
be able to deposit funds into an account that has already been closed.
Assuming
the KEOGH has not yet been closed, did you maximize your 2012 employee
contribution amount of $17,000 to the KEOGH? If not, you can apply it as
Roth Solo 401k contribution. Further, if you are aged 50 or older, you can
apply the $5,500 catchup amount to the Roth Solo 401k as well, assuming you did
not apply it to the KEOGH already. As you can see the key is not exceed the
annual contributions between all qualified plans combined. See IRS Publication 560 for more information
regarding contributing to multiple retirement plans.
Thank you for your assistance,
Max in Iowa
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