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  1. Hi, I am doing calculations for contributions to a solo 401(k) for the first time. While I followed the rules for these calculations, I am still not sure if I did them correctly or if I am missing anything. I have a Qualified Joint Venture (QJV) with my spouse, and I also have a full-time job with a 401(k) there. Our goal is to maximize contributions to the solo traditional 401(k) and make mega-backdoor Roth contributions for the rest of the funds. Contributions to 401k from my full time W2 job are the following: Employee Contributions: $21,531.52 (aggregated across retirement plans) Employer Contributions: $8,074.32 (does not aggregated across retirement plans) Spouse does not have W2 job but materially participate in QJV. QJV income (before any taxes) for me and my spouse: $167,462 QJV income for each of us: $167,462 / 2 = $83,731.00 Earnings subject to self-employment tax: $83,731 * 0.9235 = $77,325.58 One-half of the self-employment tax: $77,325.58 * 0.0765 = $5,915.41 Net earnings from QJV income: $83,731.00 - $5,915.41 = $77,815.59 And here are calculations for contributions: Are those look correct? Do I miss something? Thank you in advance for any help.
  2. Well I think the answer is very simple - contribution deadline is business tax return due data for ALL contribution types.
  3. is after-tax 401(k) contributions just an employee contributions? I thought math should the same as for all employee contributions
  4. how do I make such selection if I do not have w2? Are you sure? I found contradicted info: Something to be aware of is that the W-2 deadline can complicate the employee contribution to the Solo 401k. W-2 forms must be filed by January 31, 2023, and include the employee contributions. As a result, you should make your employee contributions (up to $20,500 for 2022) by January 31st, 2023, or you should decide the amount you plan to contribute so that you can file an accurate W-2 by January 31st, 2023. If you have not yet made the employee contribution, you will have until the federal tax filing dates (including extensions) to make both the employee and employer contributions.
  5. Apologies for any confusion, but it seems you may have misunderstood my original message. I am interested in contributing for the 2023 tax year, not 2022. My plan is to make the following contributions: 1) Pre-tax contributions to my traditional 401k. This includes both employer and employee contributions. 2) After-tax contributions to my Roth 401k. This also includes both employer and employee contributions. 3) After-tax contributions to my after-tax 401k, also known as a 'mega backdoor Roth'. For which contributions, deadline is January 31 and which deadline is tax filing date?
  6. I've had no luck with this so far, but I will continue to search for a good service provider. I have examined the procedure, and it seems the task isn't the most challenging. I simply need to remember to finalize a 5500 for the cancelled plan.
  7. Thank you for your suggestion. I've reached out to several third party Solo 401k providers, and the best they can offer is to amend (or restate) the plan, but they cannot help with a plan merge. I've also contacted Fidelity, where our Solo 401ks currently is, and they've confirmed that they can assist with the merge. Just to clarify - is amending (or restating) the plan the same as adopting a plan?
  8. I am trying to understand if contributions (Pretax, Roth, and after-tax, also known as Mega Backdoor Roth) to a solo 401k can be made before the tax deadline and not strictly by the end of the year for a Sole Proprietorship. I was reading that contributions can be made before the business tax deadline, except for the Employee contribution part, which should be made before the end of the year: While employee and employer contributions may be extended until the company tax return deadline, you will typically need to file a W-2 for your wages (e.g. an S-Corporation) by January 31st, 2023. The W-2 will include your wage income and any deduction for employee retirement plan contributions will be reduced on the W-2 in box 12. As a result, you should make your employee contributions (up to $20,500 for 2022) by January 31st, 2023 or you should at least determine the amount you plan to contribute so that you can file an accurate W-2 by January 31st, 2023. If you don’t have all or a portion of the funds you plan to contribute available by the time your W-2 is due, you can set the amount you plan to contribute to the 401(k) as an employee contribution, and will then need to make a said contribution by the tax return deadline (including extensions). I am a bit confused about the W2 part. As a Sole Proprietorship, I do not have a W2 form (I give my customers a W9 form when making contract work). Does it mean I can make the Employee contribution part before the tax deadline? Also, can the Mega Backdoor Roth be done before the tax deadline as well?
  9. My spouse and I have separate solo 401k plans (let’s call them Plan A and Plan B), which we opened a few years ago when we undertook self-employed activities. This year, we opened an LLC as QJV and are looking to consolidate those solo 401k plans into one (let’s call it Plan C). Furthermore, after some research, it seems that in community property states, we’re considered a Controlled Group and can only have one solo 401k plan. However, we have two solo 401k plans and need to fix this as soon as possible. We are trying to understand the best course of action. Option #1: 1) Adopt a new solo 401k plan (Plan C) 2) Perform trustee-trustee transfers from Plan A and B to the new Plan C 3) Close the old solo 401k plans (Plans A and B) Option #2: 1) Amend (restate) Plan A so it becomes Plan C 2) Perform a trustee-trustee transfer from Plan B to the new Plan C 3) Close solo 401k plan (Plan B) Option #3: Create a controlled group plan, which will list both Plan A and Plan B in the solo 401(k) plan documents (Plan C). It seems like Option #1 is the simplest one, but I’m unsure if it’s ok to do it. Option #2 acts as a middle ground, but its benefits compared to Option #1 aren’t very clear to me. Option #3 appears to be the most complex.
  10. We established an LLC at the beginning of this year, with just two members – my spouse and myself. We reside in a community property state and file our taxes jointly as a married couple. Throughout this year, we've utilized our LLC to carry out business activities. My spouse has been working on a separate project, having earned about $1k, while I undertook contract work in the IT field, earning roughly $200k. Both of us were actively involved in the LLC's operations, each contributing more than 500 hours of work (met material participation test). However, we've encountered conflicting information regarding the tax filing status for our LLC and contributions to our 401k plans. Can we both contribute to the maximum allowable amount for our 401k plans, which is $66k each, or is my spouse only allowed to contribute $1k, reflecting their earned income?
  11. Hello all, hoping for some advice/clarity on this topic. A few years ago, my spouse and I started self employed activities. After checking with our CPA we opened two solo 401k plans (one for me and another for my spouse). We did not contribute our self-employed income to our solo 401(k). At that time, we were changing our w2 jobs and we had to move out of our 401k funds. We could put 410k funds in trad IRAs but it would block us from backdoor roth conversions. So we used our solo 401k accounts and put our funds there (my spouse's 401k funds went to her solo 401k and my 410k funds went to my solo 401k). We continue self-employment activities and recently opened an LLC (taxed as qualified joint venture) for new project. I talked with TPA and they said that all self employed activities and LLC income should go under one solo 401k plan. So now we are starting to think about a way to fix this situation and consolidate our solo 401k plans. TPA suggested the following course of action: 1) You will select "restatement on the application," You will use your current plan name. However, you can input your new LLC and EIN. On the application you will choose your desired trust name and we will obtain and EIN for that trust name. 2) We will be giving you a new adoption agreement. 3) Do trustee-trustee transfers from Fidelity solo 401 accounts 4) Close Fidelity solo 401 accounts I have a concern regarding this new solo 401(k) plan that you described above. It says this plan would be linked to the LLC and its EIN. Does it mean that the solo 401k plan will not be protected by "limited liability" and that anyone who may sue LLC may claim the new solo 401k plan funds as well (assuming there is no "piercing the veil")? What would happen in the event that an LLC is disallowed (closed)? Is it possible to create a "general purpose" LLC plan that would allow my spouse and me to contribute earned income from the LLC as well as from self-employed activities and not depend on the LLC?
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