LLC deferrals into a 401(k)

[Lori H]

Members take draws out during the course of the year, can they defer on those draws or wait until after the close of the plan year to defer pending preparation of their k-1's or both?

[ETA Consulting LLC]

I researched this many, many, many years ago. At that time, my research concluded that they may defer from the draw despite the fact that they receive income only one day of the year (and that is the last day of their fiscal year). I cannot imagine that has changed.

Good Luck!

[PensionPro]

And from the preamble to the final 401k regs ...

One commentator asked for clarification of the interaction between these timing rules and the rule under the regulations that treats a self-employed individual’s earned income as being currently available on the last day of the individual’s taxable year and whether this last day rule precludes a partner from making elective contributions during the year through a reduction in the partner’s draw. The restriction on the timing of contributions is not intended to prevent a partner from deferring amounts that are paid to the partner throughout the year on account of services performed by the partner during the year, and the final regulations have been modified to clarify this point. However, self-employed individuals who take advantage of this opportunity to defer amounts during the year must make sure that the amount contributed during the year will not exceed the limits (such as the limits of section 415) that will apply to the individual, based on the individual’s actual earned income for the relevant period.

[austin3515]

And don't forget to get an election before year-end if it will be funded after year-end.