Announcement

Collapse
No announcement yet.

1099 income retirement contributions options while also S-corp partner

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

  • jfoxcpacfp
    replied
    Originally posted by GasFIRE View Post
    EmployER contribution limits are per employer:



    For your W-2 and 1099 income you potentially have $57K of space per plan if the rules are set-up advantageously and you have the income to justify the contributions (both employEE and employER).
    Make that $58k in 2021

    Leave a comment:


  • GasFIRE
    replied
    EmployER contribution limits are per employer:



    For your W-2 and 1099 income you potentially have $57K of space per plan if the rules are set-up advantageously and you have the income to justify the contributions (both employEE and employER).

    Leave a comment:


  • Thedoc2049
    replied
    yes, but if you have two 401K the maximum EMPLOYEE contribution between the two is 19,500 (more if > 50 years). But is the maximum EMPLOYER contribution limited to a total of 57,000 per year between both 401k, or does the 57K maximum apply to each 401k?

    Leave a comment:


  • childay
    replied
    Originally posted by Thedoc2049 View Post
    But what about employer contributions between s Corp 401k and solo 401k?
    Employer is separate from employee contribution

    Guess what? You can have multiple 401(k) accounts, saving you thousands in additional taxes every year. But it gets pretty complicated. Here are the rules.

    Leave a comment:


  • Thedoc2049
    replied
    But what about employer contributions between s Corp 401k and solo 401k?

    Leave a comment:


  • notanotherusername
    replied
    Important number for age is 50 (allows catch-up of additional $6500 employEE contributions), not 59.5. So if turning 50 or above in the tax year under discussion then total of $26000 employEE contributions to the 2 401k's. If < age 50 then total of $19,500.

    Leave a comment:


  • Thedoc2049
    replied
    One other question - so if you have 401k through s Corp and solo 401k for 1099 income

    assuming leas than 59.5 yrs of age, the maximum employee contribution to both plans is 19.5K per year

    is the total employer contribution also limited to 57k total to all 401k plans? Or is the 57k limit per plan ?

    Leave a comment:


  • spiritrider
    replied
    Originally posted by Thedoc2049 View Post
    I have heard solo 401k takes some paperwork and need to be set up in year you want to make the contribution where as SEP IRA contributions could be made after calendar year but would have to be made before you file your taxes for that year.
    This is no longer true.

    Effective with the 2020 tax year, you can adopt a one participant 401k and make employer contributions until your tax filing deadline including extensions.

    However, since you must make an employee deferral election by 12/31. You can not make employee deferral contributions for the previous year when you adopt a one-participant 401k after 12/31.

    If you are already maximizing the employee deferral limit elsewhere, this restriction is irrelevant.

    Leave a comment:


  • jfoxcpacfp
    replied
    I believe you can have a solo-k based on that income, then, but I hesitate to give a definitive answer, as this is an area for specialists. Hopefully, spiritrider will pick up on this comment and jump in.

    Leave a comment:


  • Thedoc2049
    replied
    I own 5.7% of the S Corp (approx 15 equal partners but will grow in future) … 1099 income is not related to the practice income. Both involve medicine but the practice is income generated from clinical services, 1099 income is speaking, pharma consulting, legal opinions/consulting.

    Leave a comment:


  • jfoxcpacfp
    replied
    Does the 1099 income have any relationship to the income the s-corp earns? Ex - same hospital, any other similarities? How much of the S-corp do you own?

    Leave a comment:


  • 1099 income retirement contributions options while also S-corp partner

    What retirement account options are available for 1099 income if you also receive W2/K1 as S-corp partner and have 401k through that S-corp?

    My understanding for 1099 income, could use solo 401k or SEP IRA? I have heard solo 401k takes some paperwork and need to be set up in year you want to make the contribution where as SEP IRA contributions could be made after calendar year but would have to be made before you file your taxes for that year.

    Also, if you do backdoor roth IRA, SEP IRA would be affected annual by pro rata rule?

    Thanks for the advice on options. Curious what others do in this situation.
Working...
X