Result of Change in Self-Employment Status on Solo 401k

QUESTIONS: If I were to change my federal tax status to be taxed as an S-corp (I have an LLC taxed as sole proprietor now), would that effect my solo 401k? If so how?

ANSWERS: It would effect how contributions are calculated. Please see the following.

The annual solo 401k contribution limits as determined by the type of entity sponsoring the solo 401k plan.

• If the entity type is a Sole Proprietor, the starting figure for calculating the annual solo 401k contribution is line 31 of Schedule C.
• If the entity type is a C-Corporation, the starting figure for calculating the annual solo 401k contribution is W-2 income.
• If the entity type is an S-Corporation, the starting figure for calculating the annual solo 401k contribution is W-2 income.
• If the entity type is a Partnership, the starting figure for calculating the annual solo 401k contribution is K-1 (Form 1065) line 14.

ANSWERS CONTINUED: It would also effect the solo 401k contribution deadline in the following fashion.

The self-directed Solo 401k contribution deadlines are driven by the type of entity sponsoring the self-directed solo 401k.

• If the entity type is a Sole Proprietorship, the annual solo 401k contribution deadline is April 15, or October 15 if tax return extension is filed.
• If the entity type is an LLC taxed as an S-Corporation, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.
• If the entity type is an LLC taxed as a Partnership, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.
• If the entity type is an LLC taxed as a Sole Proprietorship, the annual solo 401k contribution deadline is April 15, or October 15 if tax return extension is filed.
• If the entity type is a Partnership, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.
• If the entity type is an S or C-Corporation, the annual solo 401k contribution deadline is March 15, or September 15 if tax return extension is filed.

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