QUESTION: I am both an employee and self employed through my LLC. Therefore, I have solo 401k with two jobs. I max out my 401-k contribution at work so
I would not be able to contribute more in the new solo 401-k, is that correct.
If so, can my wife make a contribution to a solo plan?
Thanks!
Eric L, CPA from Michigan
ANSWER:
Keep in mind that a Solo 401k plan is
made up of two contribution types, employee and employer; therefore, if you
have maxed out your employee contribution with job one (your day job), you
still qualify for making the employer contribution to your solo 401k as long as
the self-employed business for which the Solo 401k was adopted through
generates income. As such, you can
contribute to both the current employer 401k and the new solo 401k for your self-employed business.
With respect to your spouse
contributing to the solo 401k plan,
yes she qualifies since she is employed with your self-employed business,
provided she receives compensation for services rendered. As your spouse and a participant
of the Solo 401k, she can also process a rollover to the solo 401k from other
IRAs or former employer retirement plans such as a 401k.
No comments:
Post a Comment