Self-Employed: SEP-IRA AND Solo 401k Contributions

[bassguitar115]

I'm self-employed and currently max out my SEP-IRA. However, I'm going to open a solo 401k for 2018 so that I can contribute significantly more. Both are opened for the same schedule c business with no employees other than myself. Will I be able to contribute to both of them in the following situation?

Net self-employment income = $60,000
Adjusted net self-employment income =$55,761

SEP IRA Employer Contribution = $11,152 (20% of above)
Solo 401k Elective Deferral (employee contribution) = $18,500 (max allowed)
Solo 401k Profit-Sharing (employer contribution) = $11,152 (20% of above)

Basically, can I contribute $40,804 (since it is below the $55,000 limit) for 2018 or am I only allowed to contribute $29,652?

[terran]

No you can't do that. If you can have them open and contribute to both at the same time (I don't know if that's allowed or not) the employer portion will be combined between them, so that would be one $11512 contribution.

[Evgenia]

We've experimented with both of these as well. According to our tax accountant, it's an either-or, not both. But, you can take both Solo 401(k) contributions, as you've noted them here. We opened a Solo 401(k) with Vanguard and it was a good experience, if you're looking for a place to open one.

[bassguitar115]

No you can't do that. If you can have them open and contribute to both at the same time (I don't know if that's allowed or not) the employer portion will be combined between them, so that would be one $11512 contribution.

Thanks! This is what I figured, but I wanted to be absolutely sure.

We've experimented with both of these as well. According to our tax accountant, it's an either-or, not both. But, you can take both Solo 401(k) contributions, as you've noted them here. We opened a Solo 401(k) with Vanguard and it was a good experience, if you're looking for a place to open one.

I'm going to open the solo 401k with Vanguard as well. The only disappointing thing is that the VTSAX is not available (they only have investor shares available in the 401k). This is pretty much the only reason I will benefit from having both a SEP-IRA and solo 401k. I can put my 20% employer contribution into VTSAX in my SEP-IRA and my elective deferral into the solo 401k.