ForumsSolo 401k ContributionsEmployee Contribution Procedure for LLC filing tax as partnership

Forums Solo 401k Solo 401k Contributions Employee Contribution Procedure for LLC filing tax as partnership

  • Employee Contribution Procedure for LLC filing tax as partnership

    2 Replies
  • Top SubjectSolo 401k,Solo 401k Contributions
    Top ForumsSolo 401k, Solo 401k Contributions

    Mustafa kathawala
    Top SubjectSolo 401k,Solo 401k Contributions

    December 3, 2021 at 12:12 pm

    I have a LLC which files as partnership. (We do not file as S Corp). Hence as a owner we do not take any wages W-2.

    In this situation, can I do Employee (19k) contribution as well as Employer Contribution both after calendar year? So for example for 2021 year, can I do employee contribution in 2022?

    Mustafa kathawala
  • 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 1:03 pm

    @MK2020

    Top SubjectSolo 401k,Solo 401k Contributions

    The annual solo 401k contribution limits depends on the type of entity sponsoring the solo 401k plan.

    • If the entity type is a Sole Proprietor, it is equal to line 31 of Schedule C(after deducting one-half of self-employment tax).
    • If the entity type is a C-Corporation, it is equal to W-2income from your self-employed business (“Box 1 plus any pre-tax elective deferrals NOT in Box 1).
    • If the entity type is an S–Corporation, it is equal to W-2income from your self-employed business (“Box 1 plus any pre-tax elective deferrals NOT in Box 1).
    • If the entity type is a Partnership, it is equal K-1 (Form 1065) line 14 from your self-employed business (after deducting one-half of self-employment tax).

    The self-directed 401k contribution deadlines are based on the type of entity sponsoring the solo 401k.

    • If the entity type is a Sole Proprietorship, the annual solo401k contribution deadline is April 15, or October 15 if tax return extension is timely filed.
    • If the entity type is an LLC taxed as an S-Corporation (calendar year), the annual solo401k contribution deadline is March 15, or September 15 if tax return extension is timely filed.
    • If the entity type is an LLC taxed as a Partnership (calendar year), the annual solo401k contribution deadline is March 15, or September 15 if tax return extension is timely filed.
      If the entity type is a Partnership (calendar year), the annual solo401k contribution deadline is March 15, or September 15
    • if tax return extension is timely filed.
      If the entity type is an S-Corporation (calendar year), the annual solo401k contribution deadline is March 15, or September 15 if tax return extension is timely filed.
    • If the entity type is an C-Corporation (calendar year), the annual solo401k contribution deadline is April 15, or September 15 if tax return extension is timely filed.

    Also, employee contributions for a full-time employer plan such as one that you might have through a day job must be made by the end of the year.
    The rules are different for solo 401(k) plans and this is clear per IRS Publication 560 which clearly states that both employee and employer contributions can be made any time up until the tax return deadline including any timely filed extension. For example, please see the table on page 3 of IRS Publication 560.

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