ForumsSolo 401k – EligibilityConfused – Can I have a Solo401k in a Partnership LLC without w2 wages?

Forums Solo 401k Solo 401k – Eligibility Confused – Can I have a Solo401k in a Partnership LLC without w2 wages?

  • Confused – Can I have a Solo401k in a Partnership LLC without w2 wages?

    George Blower replied 1 year, 3 months ago 2 Members · 2 Posts
  • 1 Reply
  • Top SubjectSolo 401k – Eligibility
    Top ForumsSolo 401k – Eligibility

    Rupa A
    Top SubjectSolo 401k – Eligibility

    March 10, 2023 at 3:32 pm

    In my freelancing job I got a 1099 for 2022 and set up my Solo401k account subsequently.

    I have a Partnership LLC and wrapped up my tax work today. My accountant after removing my expenses put the remainder on LINE 1 – ORDINARY BUSINESS INCOME.

    While listening to George’s webinar, I heard that this should be in LINE 14- SELF EMPLOYMENT EARNINGS.

    So i called my Accountant, and he said no problem he can do that for me.

    Thing is that I didn’t take out any money out on a w2 as I believed that in a Partnership LLC I can just take funds out in form of a distribution.

    But now for Employer and Employee Pre Tax contribution, how will this work? Have I painted myself in a corner?

    Thank you in advance.

    Rupa A
  • George Blower

    Top SubjectDaily Live Webinar,Solo 401k
    Top ForumsDaily Live Webinar, Solo 401k

    George Blower

    George Blower

    Top SubjectDaily Live Webinar,Solo 401k

    March 13, 2023 at 9:06 am

    The ability to make solo 401k contributions is based on self-employment compensation. For a self-employed person whose business is taxed as a partnership, self-employment compensation is equal to line 14 of the K-1 less one-half of the self-employment tax. There is no need from a solo 401k perspective to report wages on a w-2 to justify contributions to a solo 401k.

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