So I'm a EM guy, work for multiple groups all on 1099s. I am going to contribute to the only 401k (solo) I have. I can stash away up to 54k correct? I am not incorporated. I am not a partner in any group and do not get a match.
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yes, that is correct. Since you qualify as being an independent contractor, you can contribute to the 401k both from the employee and the employer portions, which adds up to a limit of 54k a year. What's more, is that if you also have a w2 position at one of your gigs, you can also have a SEP IRA in addition to your 401k. -
What’s more, is that if you also have a w2 position at one of your gigs, you can also have a SEP IRA in addition to your 401k.
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Sorry, I disagree. If zback is an employee, it is up to the employer to set up and fund the SEP. Perhaps I misunderstood what you were saying - anything you could add to the original statement?My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 to schedule CPA and Financial Planning initial introductions for Fox CPA and Wrenne Financial Planning, my affiliate firm. We charge Flat Fees for both CPA & Fee-Only Financial Planning.Comment
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I do not have to specify anything specific. I can just send a one time personal check for 54k to fidelity account, correct?
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I would talk to Fidelity, but they should have you fill out a deposit form on which you'll show the employee and employer contribution. In terms of how this gets sent in I know you can wire or send a check for the employer contribution - not sure about the employee contribution. Regarding the SEP comment above, you wouldn't be able to safely do the Backdoor Roth if you did that.Comment
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I do not have to specify anything specific. I can just send a one time personal check for 54k to fidelity account, correct?
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(see below for correction of my mistake)
I would talk to Fidelity, but they should have you fill out a deposit form on which you’ll show the employee and employer contribution.
Click to expand...
TDA d/n care about the division between employer and employee when you contribute and I bet it's the same with Fidelity. You just send or wire the $$.My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 to schedule CPA and Financial Planning initial introductions for Fox CPA and Wrenne Financial Planning, my affiliate firm. We charge Flat Fees for both CPA & Fee-Only Financial Planning.Comment
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I do not have to specify anything specific. I can just send a one time personal check for 54k to fidelity account, correct?
Click to expand…
Assuming you are filing as a sole proprietor or SMLLC, you must contribute the $18k by 01/15/18 and the balance of $36k by the due date of your income tax return, including extensions. If you are incorporated, you need to contribute $18k by 12/31/17.
I would talk to Fidelity, but they should have you fill out a deposit form on which you’ll show the employee and employer contribution.
Click to expand…
TDA d/n care about the division between employer and employee when you contribute and I bet it’s the same with Fidelity. You just send or wire the $$.
Click to expand...
Fidelity's form:
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/customer-service/self-employed-401k-contribution-remittance.pdf
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What’s more, is that if you also have a w2 position at one of your gigs, you can also have a SEP IRA in addition to your 401k.
Click to expand…
Sorry, I disagree. If zback is an employee, it is up to the employer to set up and fund the SEP. Perhaps I misunderstood what you were saying – anything you could add to the original statement?
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I guess what I meant was if he was an employee and had an employer SEP with matching contributions, then he could still setup another retirement plan if he also had a 1099, like a 401k. Or, if he's got two 1099 jobs, could setup two plans for each...Comment
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I do not have to specify anything specific. I can just send a one time personal check for 54k to fidelity account, correct?
Click to expand…
Assuming you are filing as a sole proprietor or SMLLC, you must contribute the $18k by 01/15/18 and the balance of $36k by the due date of your income tax return, including extensions. If you are incorporated, you need to contribute $18k by 12/31/17.
I would talk to Fidelity, but they should have you fill out a deposit form on which you’ll show the employee and employer contribution.
Click to expand…
TDA d/n care about the division between employer and employee when you contribute and I bet it’s the same with Fidelity. You just send or wire the $$.
Click to expand…
Fidelity’s form:
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/customer-service/self-employed-401k-contribution-remittance.pdf
Click to expand...
...and so it's notMy passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 to schedule CPA and Financial Planning initial introductions for Fox CPA and Wrenne Financial Planning, my affiliate firm. We charge Flat Fees for both CPA & Fee-Only Financial Planning.Comment
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What’s more, is that if you also have a w2 position at one of your gigs, you can also have a SEP IRA in addition to your 401k.
Click to expand…
Sorry, I disagree. If zback is an employee, it is up to the employer to set up and fund the SEP. Perhaps I misunderstood what you were saying – anything you could add to the original statement?
Click to expand…
I guess what I meant was if he was an employee and had an employer SEP with matching contributions, then he could still setup another retirement plan if he also had a 1099, like a 401k. Or, if he’s got two 1099 jobs, could setup two plans for each…
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I think we're going in circles and confusing zback (me, too, for that matter). As he stated, he's solely IC. No opportunity for a 2nd plan. If he has 2 1099 jobs (which he does), he still can have only one plan. All of his IC income is aggregated for purposes of the $54k limit.My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 to schedule CPA and Financial Planning initial introductions for Fox CPA and Wrenne Financial Planning, my affiliate firm. We charge Flat Fees for both CPA & Fee-Only Financial Planning.Comment
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Assuming you are filing as a sole proprietor or SMLLC, you must contribute the $18k by 01/15/18 and the balance of $36k by the due date of your income tax return, including extensions. If you are incorporated, you need to contribute $18k by 12/31/17.
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Are you sure? For non-incorporated I believe the entire amount can be contributed by the tax deadline. The "employee" merely must "elect" their contribution before then, by Dec 31st.Comment
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I do not have to specify anything specific. I can just send a one time personal check for 54k to fidelity account, correct?
Click to expand…
Assuming you are filing as a sole proprietor or SMLLC, you must contribute the $18k by 01/15/18 and the balance of $36k by the due date of your income tax return, including extensions. If you are incorporated, you need to contribute $18k by 12/31/17.
I would talk to Fidelity, but they should have you fill out a deposit form on which you’ll show the employee and employer contribution.
Click to expand…
TDA d/n care about the division between employer and employee when you contribute and I bet it’s the same with Fidelity. You just send or wire the $$.
Click to expand…
Fidelity’s form:
https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/customer-service/self-employed-401k-contribution-remittance.pdf
Click to expand…
…and so it’s not
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Right, so same check but they want you to differentiate the employee vs employer components (it appears).Comment
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Right, so same check but they want you to differentiate the employee vs employer components (it appears).
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I believe Fidelity just has that there for the customer's record-keeping, they don't actually keep track of it.Comment
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Assuming you are filing as a sole proprietor or SMLLC, you must contribute the $18k by 01/15/18 and the balance of $36k by the due date of your income tax return, including extensions. If you are incorporated, you need to contribute $18k by 12/31/17.
Click to expand…
Are you sure? For non-incorporated I believe the entire amount can be contributed by the tax deadline. The “employee” merely must “elect” their contribution before then, by Dec 31st.
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No, I'm not sure and you are absolutely right. I did not check with my partner first, and should have - she handles all of the filing deadlines. The rules are:
- 15 days after your final paycheck to contribute the employee portion - this is for corporations.
- Sole proprietorships, SMLLCs, and partnerships, due date of the tax return, including extensions. I'm not sure about the 12/31 "election", though - what are you referring to?
I'll delete what I typed above. Thx!
My passion is protecting clients and others from predatory and ignorant advisors 270-247-6087 to schedule CPA and Financial Planning initial introductions for Fox CPA and Wrenne Financial Planning, my affiliate firm. We charge Flat Fees for both CPA & Fee-Only Financial Planning.Comment
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This is a common oversight of one-participant 401k plans. An employee elective deferral can not be made before a deferral election has been made.
For a w-2 employee, this means the election must occur before the payroll that deducts the deferral occurs. However, for the self-employed, their compensation is treated as being received on the last day of the year. Therefore, this means the "election" must be made by 12/31.
This is not something that is filed with the IRS. It is simply retained in the employer's records. An election remains in effect until revoked or changed. This can be a simple % of compensation, fixed contribution over a period or some more complex form as long as it is deterministic when applied to compensation.
I'm sure if the IRS ever requested this from a sole proprietor, they could "find" this in their records. However, I suggest that anyone who can't find theirs, do so now or create one before 12/31/17.Comment
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