Retirein15

Thanks for the detailed explanation. My goal is to contribute to pretax accounts as much as possible. I think I got it, so for me: 360k - 4820 (SE Tax) - 150k (pension) - $11613 (profit sharing) = $193,565 and $193,565 * 6% = 11,613 thus the circle ⭕️ Question: ”max DB contribution is limited as well. It’s based on your highest consecutive 3-year average NESE. ” In 2023 I started my business late in the year and my net earning was around $40k. In 2024 you can see in my OP net earning is $360k. Since I only have a partial year and one whole year how does the 3 year average calculation work? thank you.

Im in a high tax bracket and in a high income tax state. I also setup the solo 401k to do MBR option.

Hi, I am working at two jobs one W2 and one 1099 this year and am thinking about setting up a Cash Balance Plan. I know I have to hirer someone to help set this up but I want to understand some basics first. Can someone help explain to me how this will affect my Solo 401k pretax contributions? I read the limit is 6%, but 6% of what? Here are my rounded numbers: W2 >$168,000 (maxed out $23k employEE) 1099 Gross Pay $415,000 (separate sole proprietor) Total Expenses $55,000 Net Income after Pension $360,000 1/2 SE Tax $4800 (360k *0.9235 *0.029 *0.5) Cash Balance Plan $150,000 (estimated) Adjusted Net Profit $205,200 So is it 6% of $205,200 = $12,312? Thank you.