Contributions dedline for Solo 401k as Sole Proprietorship

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?

For sole proprietors, the compensation is considered "earned" on December 31, but not technically determined until the 1040 is done. So the deferral deposits can be made up until the 1040 is filed.

However, the owner must have made an election to defer on or before the prior December 31 because all 401(k) deferrals have to be elected before the compensation is earned.

After-tax contributions have to be deposited by January 31 in order to be credited for the prior year. The Roth conversion typically takes place on the same day of the after tax contribution deposit.

You as an employer can still make employer contributions up until your filing deadline.

So, it's likely that all your deadlines have passed except for the employer contribution.

On 10/8/2023 at 8:19 PM, Bill Presson said:

So, it's likely that all your deadlines have passed except for the employer contribution.

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? 

Then just ignore my last line.

On 10/8/2023 at 8:19 PM, Bill Presson said:

However, the owner must have made an election to defer on or before the prior December 31 because all 401(k) deferrals have to be elected before the compensation is earned.

how do I make such selection if I do not have w2? 

On 10/8/2023 at 8:19 PM, Bill Presson said:

After-tax contributions have to be deposited by January 31 in order to be credited for the prior year.

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 hours ago, ill said:

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.
 

Whoever wrote this is talking about, or trying to talk about, 401(k) contributions, not after-tax contributions. It's kind of muddled but none of it is relevant to after-tax contributions.

@ill I answered your questions. This is a board for consultants to discuss various provisions. It's not free advice for people that don't want to pay.

Hire someone to provide you expert assistance and quit being cheap.

6 hours ago, Bird said:

after-tax contributions

is after-tax 401(k) contributions just an employee contributions? I thought math should the same as for all employee contributions

Contributions to the plan depending on the terms of the plan document could include any of the following sources and I may be missing some:

Employee: Traditional 401(k), ROTH 401(k), Voluntary After Tax, Rollover

Employer: Matching, Safe Harbor Matching, Profit Sharing, Safe Harbor Non-elective, Qualified Non-elective, Qualified Matching, Prevailing Wage.

You might also have ROTH conversion sources for the sources above if the plan allows for in-plan conversions, rollovers or transfers.

All of them might have slightly difference rules that they need to follow with respect to vesting, timing of deposit, and withdrawal eligibility.

Your TPA should be able to help you out with specific questions about your plan.

14 hours ago, ill said:

is after-tax 401(k) contributions just an employee contributions? I thought math should the same as for all employee contributions

After tax contributions are not after tax 401(k) contributions. You're the person who said this wasn't too challenging.

14 hours ago, Lou S. said:

Your TPA should be able to help you out with specific questions about your plan.

ill, you must be getting the plan document from somewhere and I suggest that you ask the document provider to explain what the document does or does not allow you to do.  Most providers will even do all of the math for you.

Keep it simple and explain your goal, such as "My expected net earnings from self-employment is $xxx,xxx and my goal is to maximize my contributions to the plan and have as much as possible wind up as Roth."

If you have insomnia or crave detail, you should enjoy spending some time with the attached Publication 560 Retirement Plans for Small Business.

Good luck!

p560.pdf

Well I think the answer is very simple - contribution deadline is business tax return due data for ALL contribution types.

On 10/14/2023 at 6:48 PM, ill said:

Well I think the answer is very simple - contribution deadline is business tax return due data for ALL contribution types.

So now you're arguing with us? Wow. Just an FYI, "Voluntary after tax contributions" are not exactly common and not listed on the IRS chart. 

Then why are you asking here?

This thread truly is an example of a Donald Rumsfeld "unknown unknown" for the OP.

“There are known knowns — there are things we know we know. We also know there are known unknowns — that is to say, we know there are some things we do not know. But there are also unknown unknowns, the ones we don’t know we don’t know.”

We all know how that turned out.