Author Topic: Solo 401k with Spouse  (Read 503 times)

RC17

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Solo 401k with Spouse
« on: August 22, 2018, 09:18:02 PM »
My spouse has a sole proprietorship with an EIN for his side gigs. He set up a solo 401k with his EIN and added me to the plan with my own account. I then had my own side gig and gave the company his EIN on the W9. My earnings were reported on a 1099 and was filled with our taxes that year (married, joint). Concurrently, we contributed a portion of my earnings from my side gig to my 401k under his plan (well under the 401k contribution limits rules).

My question is--was what we did correct per IRS guidelines? Can I use his EIN on W9s to give to companies for contract work? Is it okay for me to have an account under his solo 401k?

katsiki

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Re: Solo 401k with Spouse
« Reply #1 on: August 28, 2018, 06:31:08 PM »
Hmm...  you may want to post in the tax forum instead. 

Maybe one of our rockstar CPA's will chime in. 

@SeattleCPA
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CareCPA

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Re: Solo 401k with Spouse
« Reply #2 on: August 28, 2018, 08:01:50 PM »
If you're giving out the Sole Prop (SP) EIN on a W-9, then the checks coming in from doing that work should be made out to the SP.

That said, I'm not seeing a way that you can participate in a solo 401k under your spouse's SP. If you were a partner in the business, you could participate, but then it isn't a SP anymore. If you weren't a partner in the business, you would need to be an employee of the business, in which case I would expect to see a W-2 for your work.

Maybe @SeattleCPA or another expert knows something I'm missing? While I always suggest these retirement accounts, I do encourage clients to discuss with their provider for the questions on eligibility and contribution amounts.

SeattleCPA

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Re: Solo 401k with Spouse
« Reply #3 on: August 31, 2018, 02:12:45 PM »
If you're giving out the Sole Prop (SP) EIN on a W-9, then the checks coming in from doing that work should be made out to the SP.

That said, I'm not seeing a way that you can participate in a solo 401k under your spouse's SP. If you were a partner in the business, you could participate, but then it isn't a SP anymore. If you weren't a partner in the business, you would need to be an employee of the business, in which case I would expect to see a W-2 for your work.

Maybe @SeattleCPA or another expert knows something I'm missing? While I always suggest these retirement accounts, I do encourage clients to discuss with their provider for the questions on eligibility and contribution amounts.

I agree with CareCPA.