I’m a contractor earning only 1099 income. Until now, I have been maxing out my IRA each year.
After researching SEP and Solo 401(k) plans, I like the idea of a Solo 401(k) since it has a Roth option. However, after scanning various blogs, it sounds more complicated because I need to formally separate employer and employee contributions.
I bill my clients monthly and use that as income. Each year, they send me a 1099.
Can I open a Solo 401(k), and is it complex? Would I need an accountant to separate employer and employee contributions, even though I’m a sole proprietor and both employer and employee myself? Other than requesting to open an account with my financial institution, is there anything else I need to do?
And as a follow-up: If I eventually resumed W-2 work, would that exclude me from contributing 1099 income to a Solo 401(k)?
After researching SEP and Solo 401(k) plans, I like the idea of a Solo 401(k) since it has a Roth option. However, after scanning various blogs, it sounds more complicated because I need to formally separate employer and employee contributions.
I bill my clients monthly and use that as income. Each year, they send me a 1099.
Can I open a Solo 401(k), and is it complex? Would I need an accountant to separate employer and employee contributions, even though I’m a sole proprietor and both employer and employee myself? Other than requesting to open an account with my financial institution, is there anything else I need to do?
And as a follow-up: If I eventually resumed W-2 work, would that exclude me from contributing 1099 income to a Solo 401(k)?
Statistics: Posted by dougfir — Sat Feb 08, 2025 11:06 pm — Replies 0 — Views 41