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Multiple 401k question breaking 54k limit - Partner in LLC with extra 1099

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  • Multiple 401k question breaking 54k limit - Partner in LLC with extra 1099

    I'm an doc that is part of a 40+ member group organized as an LLC. I put 54k away in 401k/profit sharing with the group.

    Assume that I make 10k on a 1099 as a speaker for a device company this year.

     

    Can I open a solo 401k at Fidelity and fund it with the full 10k?

     

     

     

  • #2
    If none of that $54k is "employee contributions" in the form of salary deferral, then you should still be able to fund up to $18k of employee contributions total across all 401(k)s.

    Otherwise, you should still be able to add 20% of net profits (income - expenses - 1/2 SE tax) as a separate unrelated employer contribution, though I admit that I do not know whether your status as a partner in the business might prevent your self-employment from being considered an "unrelated employer."  I don't think it does, but that's something I would need to ask a professional about.  I know some people do it, but again I'm uncertain if it's truly kosher.

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    • #3




      I’m an doc that is part of a 40+ member group organized as an LLC. I put 54k away in 401k/profit sharing with the group.

      Assume that I make 10k on a 1099 as a speaker for a device company this year.

      Can I open a solo 401k at Fidelity and fund it with the full 10k?
      Click to expand...


      You didn't say so, but I'm sure you are already contributing $18k as an employee in the main entity. With 40+ members, your second SE job does not constitute a member of a controlled group with the main entity. You can contribute 20% of the net profits from your separate speaking job. Note that "net profits" is not the $10k "gross receipts" but the taxable income after you deduct the expenses attributable to the income, per your schedule C.
      Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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