After I open Solo 401k plan, I plan to roll over an IRA into this Self-Directed Solo 401k . The amount is $95K.
I noticed I can put in $50K + $5,500 since I am over 50 for 2012. So, do I roll over $55,500 to my Solo 401k and wait till January 2013 to transfer the rest?
What is the $50K based on? My self-employment income in 2012 will be less than $20K. Does that impact the $49K or can I still contribute the maximum since I am rolling it over my Solo 401k?
I need to be able to put in the maximum amounts. Please let me know.
Thanks,
Yanni
I noticed I can put in $50K + $5,500 since I am over 50 for 2012. So, do I roll over $55,500 to my Solo 401k and wait till January 2013 to transfer the rest?
What is the $50K based on? My self-employment income in 2012 will be less than $20K. Does that impact the $49K or can I still contribute the maximum since I am rolling it over my Solo 401k?
I need to be able to put in the maximum amounts. Please let me know.
Thanks,
Yanni
Answer:
Rollover/transfers are not subject to the annual Solo 401k contribution limits.
In other words, the Sol 401k rules permit unlimited transfer/rollover amounts from IRAS, except for Roth
IRAs, which the rules do not allow to transfer/rollover to Solo 401k.
Answer: The annual Solo 401k maximum contribution of $50,000 for tax year 2012 is based on net self-employment income minus 1/ 2 of self-employment tax. Therefore, if your net self-employment income for 2012 is $20,000, to calculate your maximum tax-deductible contribution you would first subtract ½ of self-employment tax; then contribute the remaining amount as a tax deductible contribution since it would be well below the $50,000 plus $5,500 catch-up limit for those age 50 or older. Please use our online contribution calculator to calculate your tax-deductible contribution. To calculate your Solo 401k contribution, please visit Solo 401k contribution calculator.
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