Author Topic: Solo 401K  (Read 211 times)

joenorm

  • 5 O'Clock Shadow
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Solo 401K
« on: January 03, 2019, 05:31:36 PM »
Lets say I started a small side business(legal)  that earned 20K Per year on top of a pretty full time job.

Could I contribute 100% of that into a Solo 401K and not pay taxes on any earned income?

That seems like a pretty good deal right? I'm new to all this stuff so feel to let me know if there are better ways to think about this.

thanks

jacoavluha

  • Bristles
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Re: Solo 401K
« Reply #1 on: January 03, 2019, 06:15:44 PM »
IF you don't have any other 401k or 403b plans at your regular job that you already make contributions to. Then, you could contribute up to 100% of your first $19,000 in net self employment earnings to a solo 401k as an employee contribution.

Net self employment earnings is calculated as self employment business profit less one half self employment taxes.

If you already make contributions to a workplace retirement plan, your solo 401k contributions would be more limited.

jacoavluha

  • Bristles
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  • Posts: 266
Re: Solo 401K
« Reply #2 on: January 03, 2019, 06:30:34 PM »
I should have added. Employee contribution to the solo k could be pre-tax or Roth. If pre-tax you wouldn't pay income tax, but you would still pay self employment tax (social security and Medicare).