Author Topic: Solo 401K - Partnership Taxes & "Employee Salary Deferral"  (Read 429 times)

tpac

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Solo 401K - Partnership Taxes & "Employee Salary Deferral"
« on: September 19, 2018, 11:11:19 PM »
I am a member of a Partnership that has a Vanguard Individual 401(k) Plan. Are both the "Employee Salary Deferral" contribution scenarios below acceptable?

Scenario #1
(1) Partnership makes "Employee Salary Deferral" contributions to i401k directly from business account
(2) Contributions are treated like any other distribution for Partnership accounting purposes

Scenario #2
(1) Partnership makes distributions to members
(2) Members make "Employee Salary Deferral" contributions to i401k from personal accounts

GetSmart

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Re: Solo 401K - Partnership Taxes & "Employee Salary Deferral"
« Reply #1 on: September 20, 2018, 05:29:03 PM »
I have the same situation and I use # 1.  I believe Vanguard requires deposits made directly from the business account and not a personal account, which is why I do it that way.  Not sure if #2 is possible.

jacoavluha

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Re: Solo 401K - Partnership Taxes & "Employee Salary Deferral"
« Reply #2 on: October 05, 2018, 08:15:25 PM »
I don't get it. I'm just a novice but not sure how you can be a "partnership" but also have an individual 401k.

terran

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Re: Solo 401K - Partnership Taxes & "Employee Salary Deferral"
« Reply #3 on: October 05, 2018, 08:36:07 PM »
I don't get it. I'm just a novice but not sure how you can be a "partnership" but also have an individual 401k.

Individual Solo 401(k) plans are allowed when all employees are either owners or owner's spouses.