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Solo 401K from Surveys

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  • Solo 401K from Surveys

    I am currently employed by a hospital system and max out my 403(b) and 457 at 18k each.  I also make approximately 3-5k annually with online surveys for which I have received 1099-MISC in the past.  I wanted to find out if I could open a solo 401k to divert some of this money from surveys towards tax-deferred retirement accounts.  If so, how do I go about doing this with Vanguard (where almost the entirety of my accounts reside) and are there specific forms I would have to fill out come tax time.

  • #2

    1. Yes, you can open a SOLO-k with your profits from this endeavor.

    2. I don't use Vanguard and don't plan to, but I'm sure others will be able to help with that.

    3. You won't have to file any specific forms for your SOLO-k until the balance reaches $250k, then you'll have to file an annual 5500-EZ

    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      Since I'm maxing out my employee contributions with my 403(b) through my employed hospital position, I assume that means my contributions to the solo-401k are employer contributions and are limited to 20% of the value on the 1099-MISC?

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      • #4
        That is correct, you would be limited to the 20% value.

        Many people do not use Vanguard for solo 401k's because they do not accept 401k rollovers, which could be a factor in the future. Other brokerages do.

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        • #5




          Since I’m maxing out my employee contributions with my 403(b) through my employed hospital position, I assume that means my contributions to the solo-401k are employer contributions and are limited to 20% of the value on the 1099-MISC?
          Click to expand...


          Your contribution is limited to 20% of the net profit on your schedule C, not the amount reported on the 1099-MISC. iow, any deductions on your schedule C (pro-rated licenses, tax prep/advice, etc.) would reduce your contribution accordingly.
          Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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          • #6
            I am thinking of opening a solo 401k account with Fidelity since that allows 401k rollovers so that in the future I'd still be able to do backdoor Roth IRAs.  However, if my current employer 401k plan has only vanguard target date investments, how does that work if it's rolled over into Fidelity in the future?  Would I be able to keep the investments as is and be charged an additional fee for having vanguard investments with Fidelity?

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            • #7
              You can move your account to Vanguard after you fund it or sell your Vanguard TDFs and buy other funds (not a TDF fan) . You're not limited to only the funds offered by the specific custodian. Opening a solo-k now is a good idea, though. You'll have plenty of flexibility for investing and what custodian you use.
              Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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              • #8
                If you don't need the rollover feature and you don't mind paying the higher investor share expense ratios, the Vanguard individual 401(k) works fine. That's what we use.

                Here are the links for the paperwork you'll need to do (both the employer and employee paperwork): https://investor.vanguard.com/what-we-offer/small-business/individual-401k?lang=en

                Most people doing it with tiny amounts of income like surveys are really after the rollover feature. So Vanguard might not be their first choice (eTrade and Fidelity usually are).
                Helping those who wear the white coat get a fair shake on Wall Street since 2011

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