If someone has a Solo IRA then expands and hires a few W2 employees, then a SEP IRA can be opened and utilized going forward, and the Solo IRA would just coast along and could be sitting there until distributions are allowed?
Hi thank you for the video and sharing your knowledge. Question if someone made $300,00 as sole owner of a LLC acting as S corp for tax purposes is there any benefit to doing solo K over SEP IRA since you max the $58K contribution limit for 2021?
Great video. If a business owner is not taking a W2 salary, I assume they cannot make salary deferrals. It would only be Employer contributions into a Solo-K at that point, correct?
With 1099R or schedule C self-employment income the self-employed individual can still make employer and employer contributions, I just wouldn’t call them salary deferrals as I believe that term specifically applies to w2 withholding. Generally, the Employer is always the one sending the contributions into the plan. Even with a w2 paycheck, the employer is withholding the contributions and sending it to the employer plan on the employees behalf. If you are trying to determine how to make the contribution from their self-employment income, I would defer to the CPA, advisor or payroll specialist to avoid providing miss information. This is partly due to them reporting the contributions as well.
Hello, total contributions to a participant's account (Solo 401k), not counting catch-up contributions for those age 50 and over, cannot exceed $57,000 (for 2020; $58,000 for 2021)
For a Solo401k, I thought a business owner could have one employee, with that singular employee being their spouse.
Hello! This is true, but only for their spouse. Any other employee would disqualify them from the plan.
If someone has a Solo IRA then expands and hires a few W2 employees, then a SEP IRA can be opened and utilized going forward, and the Solo IRA would just coast along and could be sitting there until distributions are allowed?
Hello, if you decide to open a SEP IRA because you no longer qualify for the Solo 401k, you can rollover those 401k funds to the new plan.
Thank you very much
She's amazing
Hi thank you for the video and sharing your knowledge. Question if someone made $300,00 as sole owner of a LLC acting as S corp for tax purposes is there any benefit to doing solo K over SEP IRA since you max the $58K contribution limit for 2021?
Great video. If a business owner is not taking a W2 salary, I assume they cannot make salary deferrals. It would only be Employer contributions into a Solo-K at that point, correct?
With 1099R or schedule C self-employment income the self-employed individual can still make employer and employer contributions, I just wouldn’t call them salary deferrals as I believe that term specifically applies to w2 withholding.
Generally, the Employer is always the one sending the contributions into the plan.
Even with a w2 paycheck, the employer is withholding the contributions and sending it to the employer plan on the employees behalf.
If you are trying to determine how to make the contribution from their self-employment income, I would defer to the CPA, advisor or payroll specialist to avoid providing miss information. This is partly due to them reporting the contributions as well.
For a Solo 401K, an an owner, are you required to make contributions for your spouse?
Hello, total contributions to a participant's account (Solo 401k), not counting catch-up contributions for those age 50 and over, cannot exceed $57,000 (for 2020; $58,000 for 2021)