Using part-time IC income to give wife a solo401k?

[ShahMD]

Hi Peeps,

Question about a scenario.

I currently work and max out my 401k employee contributions of 18k at my full-time W2 job.

I was going to do some part time IC work at another ER and was wondering if I could pay my wife (who doesn't have a 401k). If I pay her $18k to maintain a website which advertises me for my IC work and Locums work...could she theoretically use that money to shelter $18k in her own solo401k? I ofcourse would be doing my own secondary employer contribution of 20% after costs for my own Solo401k.

Does this scenario make sense and is it legal? Thanks a ton for your help. Have a great week!

 

[jfoxcpacfp]

Yes, that is what you should do and yes, it is "legal" to pay someone to create and maintain a website. Only caveat is that I do not know of any websites produced that cost $18k to build and maintain. Are there other ways she can assist - administrative, scheduling, bookkeeping, payroll? She will either need to be part owner of the business as a partnership or be your employee, which is most likely what I would recommend. Be sure to have a written agreement of expectations and what the remuneration is for documented duties.