Forums Solo 401k Solo 401k – Eligibility Eligibility

  • Eligibility

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  • Top SubjectSolo 401k – Eligibility,Solo 401k Bank Account
    Top ForumsSolo 401k – Eligibility, Solo 401k Bank Account

    Bryan Bush
    Top SubjectSolo 401k – Eligibility,Solo 401k Bank Account

    December 2, 2021 at 6:11 pm

    I am employed by a company where I fully max out my 401k (pretax, company match, backdoor Roth). I am also self-employed as a farmer, filing schedule F as a sole proprietor under my social security number. My wife and I file a joint return. Am I eligible to open a separate solo 401k and use the backdoor Roth strategy with the maximum after-tax contribution based on my net farm income (Sch. F, line 34) less 1/2 of the social security that I pay (Long Form SE, line 12 divided by 2)?

    Bryan Bush
  • Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions
    Top ForumsSolo 401k, Solo 401k Contributions

    Mark Nolan

    Mark Nolan

    Top SubjectSolo 401k,Solo 401k Contributions

    December 3, 2021 at 5:22 am

    @BryanB

    Top SubjectSolo 401k – Eligibility,Solo 401k Bank Account

    Yes, net farm profit reported on line 34 of Schedule F qualifies as earned income from self-employment income and can thus be use for making annual solo 401k contributions including just voluntary after-tax contributions for 2021. Under a solo 401k plan, for 2021 you are not required to make pretax contributions and can solely make voluntary after tax contributions. What is more, the contributions that you have already made to your day-time job won’t impact your ability to max out the voluntary after-tax solo 401k contribution for 2021 up to the overall limit of $58,000 as long as you nave the required net self-employment income from your Farming business to get you up to the overall limit.

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