BACKGROUND: Let's be
specific so that we are definitely clear on the controlled group rules.
I'm a doctor and I have a medical
practice with 10 employees.
I am going to be an independent
contractor for another medical practice at which I will have no ownership or
control.
Thus I get two paychecks - 1) W2
from my medical practice 2) a pretax sum from the independent contractor
work
QUESTION: However, if I were to open up the solo 401k, I would be doing it as the independent contractor/sole
proprietor. Reading over these controlled group rules, would I be
excluded because I am 100% owner of my medical practice corporation and a 100%
owner of my own sole proprietorship that provides services to the other medical
practice (even though I am 0% owner of the other medical practice)?
ANSWER: You would need to be deemed a contractor
not a sole proprietor. Reason being,
sole proprietors are not excluded from the controlled group rules for solo 401k establishment purpose.
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