Author Topic: solo 401k self employed contribution limit  (Read 961 times)

FSL

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solo 401k self employed contribution limit
« on: June 27, 2016, 04:02:29 PM »
I have read through the forum archives and learned so much about solo 401ks--thank you all! I have a question on limits to which I couldn't find an answer.

My husband and I both have W2 jobs where we max out the 18k in contributions and received an employer match (and my husband's also has an additional profit sharing contribution). We have started a side hustle this year and we are planning to open a 401k. I understand that we cannot make any employee contributions into the solo 401k since we max out the 18k at our W2 jobs, however, is there any restriction on the employer contributions in the solo 401k? For example, do I need to subtract from the $53k limit for employer contributions the amount of the match we received in our w2 plan? Or is this plan completely separate? If it is separate, that would be amazing!

We expect to earn a large sum in the side hustle, so to confirm, that would mean we could each sock away 18k in W2 401k plan, get that W2 employer match, plus contribute 53k as employer contribution in solo 401k (or whatever is 20% of net self employment earnings minus 1/2 SE tax)? That would be a whole lot of tax deferral!

iamlindoro

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Re: solo 401k self employed contribution limit
« Reply #1 on: June 27, 2016, 04:35:42 PM »
Your conclusion is correct.  You can have up to $53K in employer contributions per unrelated employer.  Maximum contribution for each employer will depend on net profits and on business structure (as you appear to already know).