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Still can't figure out solo-401k eligibility (W2 employee with side 1099 income)

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  • Still can't figure out solo-401k eligibility (W2 employee with side 1099 income)

    Hi all - digging through several forum threads and multiple WCI and other financial blog posts and I still can't figure out my eligibility and maximum for a solo 401k. Basically our situation:

    Me:
    W2 income from main job (resident) about $70k. 457b governmental which we will max ($19500)
    1099 income from side hustle, about $50k.

    Spouse:
    W2 income from main job (attending) about $350k. 401a (mandatory contribute 7% and hospital match 8%), 403b (we will max $19500), and 457b governmental (we will max $19500).

    Of course, maxing back door roth IRAs also (not sure if that is relevant to this scenario)

    Based on my $50k of side hustle income, can I contribute to a solo 401k and if so, how much? I saw a limit of 25% of self-employment income (ie, $12,500 in my scenario) and was wondering if I read that right. Also does my spouse's 401a and/or 403b affect my eligibility/max for my solo 401k?

    Thanks!

  • #2
    https://docs.zoho.com/sheet/publishe...05e8140934898a


    https://obliviousinvestor.com/solo-4...on-calculator/

    check these out come back with numbers and questions

    Comment


    • saildawg
      saildawg commented
      Editing a comment
      I never grow tired of linking the finance buff spreadsheet

    • jacoavlu
      jacoavlu commented
      Editing a comment
      I should probably put the link back in my signature - I get tired of having to copy paste the link

  • #3
    Originally posted by SwitchPool View Post
    Hi all - digging through several forum threads and multiple WCI and other financial blog posts and I still can't figure out my eligibility and maximum for a solo 401k
    keep reading
    https://www.whitecoatinvestor.com/multiple-401k-rules/

    Comment


    • #4
      Originally posted by jacoavlu View Post
      Wow these were amazing, thank you! Exactly what I was looking for. Looks like I can contribute 19.5k (employee) + a percentage as an employer.

      Comment


      • #5
        Originally posted by SwitchPool View Post

        Wow these were amazing, thank you! Exactly what I was looking for. Looks like I can contribute 19.5k (employee) + a percentage as an employer.
        SwitchPool I'd double check that, 19500 as an employee is all you are allowed TOTAL across all jobs. If you maxed 19.5 as your W2, the only part you can put intop your solo 401K is the employER match from the 50K of income, the max of which the cacluators will tell you. Do not double up your employEE contributions!

        Comment


        • #6
          Originally posted by Duckworth View Post

          SwitchPool I'd double check that, 19500 as an employee is all you are allowed TOTAL across all jobs. If you maxed 19.5 as your W2, the only part you can put intop your solo 401K is the employER match from the 50K of income, the max of which the cacluators will tell you. Do not double up your employEE contributions!
          457b contributions don’t count which is why those links don’t ask anything about 457b contributions

          Comment


          • #7
            Ah I missed that only his spouse had the 403b. Op ignore my warning Thanks!

            Comment


            • #8
              Originally posted by Duckworth View Post

              SwitchPool I'd double check that, 19500 as an employee is all you are allowed TOTAL across all jobs. If you maxed 19.5 as your W2, the only part you can put intop your solo 401K is the employER match from the 50K of income, the max of which the cacluators will tell you. Do not double up your employEE contributions!
              Not applicable to OP’s calculation, but the $19.5 is voluntary contributions. Mandatory in the wife’s case is excluded from the individual limit.
              401a mandatory. 19,600. 7%x 280k limit
              403b elective. 19,500. Retirement elective limit
              457 elective. 19,500. Separate deferral limit
              The three types aren’t clearly identifiable on the calculators. I believe mandatory would be excluded from entry.

              Comment


              • #9
                Neither 401a employee mandatory contributions or voluntary after-tax contributions are considered employee elective deferrals and are not included in the 402g employee elective deferral limit.

                A 457b plan is a non-qualified plan. The 457b employee elective deferral + employer contribution limit is equal to but not included in the 402g employee elective deferral limit.

                Only employee elective deferrals to a 401k, 403b, SARSEP and SIMPLE IRA are included in the 402g employee elective deferral limit.

                Comment

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