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Solo 401k using K-1 income where I am general partner / LLC member-manager?

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  • Solo 401k using K-1 income where I am general partner / LLC member-manager?

    In 2016, I received K-1 net income of about $117,000 (box 14A). I am listed as general partner / LLC member-manager in section G. It would seem that I'm too late to open a solo 401k with this income. However, for 2017, can I open a solo 401k at the end of the year, once I have a sense for what my box 14A income will be? If so, how much can I contribute? It seems like 20% has been mentioned on some other solo 401k threads. FYI, I already contribute $18,000 to a 401k via my W2 income each year. Thanks for your help!

  • #2
    Unfortunately, no. It's a good question, too. I actually have discussed this issue with @spiritrider, a very knowledgeable participant on the forum, in the context of a client who owns .0033% of a large partnership. No matter, the partnership is the employer and the plan must be adopted by the partnership, not you as a partner.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3




      In 2016, I received K-1 net income of about $117,000 (box 14A). I am listed as general partner / LLC member-manager in section G. It would seem that I’m too late to open a solo 401k with this income. However, for 2017, can I open a solo 401k at the end of the year, once I have a sense for what my box 14A income will be? If so, how much can I contribute? It seems like 20% has been mentioned on some other solo 401k threads. FYI, I already contribute $18,000 to a 401k via my W2 income each year. Thanks for your help!
      Click to expand...


      You always have to ask the question: who's the employer?  If you are not the employer, you can not adopt a plan separate from the entity that is the employer, unless you have a separate source of income (such as a 1099), and also subject to controlled/affiliated group rules.
      Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

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      • #4
        Thanks for the replies, Johanna and Kon.

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