Announcement

Collapse
No announcement yet.

How much can I safely put in my solo 401k for limited side income?

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • How much can I safely put in my solo 401k for limited side income?

    If I make X dollars, what fraction can I safely put in my solo 401k as I go along? Assuming I am not going to make more than $19,500 employee limit in side income, and am not using the employee contributions through other plans. I could wait until the end of the fiscal year then use the finance buff calculator, but I'd rather the money was invested over the course of the year. I know I will need some money held out for medicare taxes at the least. I think I will max out all my social security taxes on my W2.

    Thanks

  • #2
    So you’ll still have to consider any relevant deductions + 1/2 Medicare tax reduction. Just contribute 50% during the year of what you calculate you’ll be able to contribute and bump it up in January if you want since you can reclass it to 2022 (assuming you’ll still have 1099 income).
    Our passion is protecting clients and others from predatory and ignorant advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

    Comment


    • #3
      A slight change, I am maxing out a 401k through a second W2 position, but still want to open an independent 401k using some 1099 income, in order to empty my SEP-IRA from my first W2 position. I am assuming I can still do this and just use the profit sharing contribution ~20%? The 1099 income will probably only be ~$3k for the year, and I know I need to open the i401k before the end of the year, so am I still safe to just maybe put ~$500 as a contribution, in for now to open it, then roll over my SEP IRA balance afterward?

      Comment


      • #4
        I like using this calculator.
        Use the solo 401k retirement calculator to calculate the maximum annual retirement contribution limit based on your income.

        Comment

        Working...
        X