Announcement

Collapse
No announcement yet.

individual 401k question

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

  • #16
    Weird because I definitely have a profit sharing Keogh through Fidelity.

    Thanks for the information--I will definitely be looking into this with my accountant.

    Comment


    • #17
      You are right, I've seen somewhere else that as recently as in the last couple of years these plans are opened at Fidelity.  So apparently, they are still allowing them to be opened.  Just make sure that someone is taking care of the plan document - this would probably be Fidelity.  And because this is for sole proprietors, you might not need a W2, just earned income.
      Kon Litovsky, Principal, Litovsky Asset Management | [email protected] | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

      Comment


      • #18
        Ok, so would appreciate any input on this.

        I asked my tax preparer how to plan for how much to put in my individual 401k (from my 1099 income) and she told us that I cannot contribute to an employer-based 401k and an individual one. She states I can only do a SEP IRA but I don't want to do this because then I can't to backdoor IRA.

        What's going on here? Am I missing something?

        Thanks!

        Comment


        • #19




          Ok, so would appreciate any input on this.

          I asked my tax preparer how to plan for how much to put in my individual 401k (from my 1099 income) and she told us that I cannot contribute to an employer-based 401k and an individual one. She states I can only do a SEP IRA but I don’t want to do this because then I can’t to backdoor IRA.

          What’s going on here? Am I missing something?

          Thanks!
          Click to expand...


          Not true, you can indeed have two 401k plans, one for your W2 job and one for your 1099 income.  However, the total salary deferral should be $18k between the two plans, and your solo 401k will pretty much act like a SEP.
          Kon Litovsky, Principal, Litovsky Asset Management | [email protected]skyManagement.com | 401k and Cash Balance plans for solo and group practices, fixed/flat fee, no AUM fees

          Comment


          • #20




            Ok, so would appreciate any input on this.

            I asked my tax preparer how to plan for how much to put in my individual 401k (from my 1099 income) and she told us that I cannot contribute to an employer-based 401k and an individual one. She states I can only do a SEP IRA but I don’t want to do this because then I can’t to backdoor IRA.

            What’s going on here? Am I missing something?

            Thanks!
            Click to expand...


            Your tax preparer is misinformed, unless you own 80%+ of the employer. You can do a salary deferral (not %-based) of $18k across all plans but you can contribute in total up to $53k per plan ($59k if age 50+) if you earn enough in each. Of course, both plans would have to have a profit-sharing component.
            Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

            Comment


            • #21
              A little bit of information on the "Keogh" issue at Fidelity.

              Most of the people reporting that they have a Keogh plan at Fidelity are just being mislead by Fidelity's back office software. If they adopted a solo 401k plan and open a solo 401k account, they have a solo 401k plan/account. Fidelity encouraged all Keogh plans to migrate to solo 401k (no employees) or small business 401k (employees). Only if you have a brain damaged TPA would you still be on a true Profit Sharing Keogh plan as there is no advantage that I know of.

              Unfortunately to this day, Fidelity's back office software is still labeling solo 401k plans as "Profit Sharing Keogh" plans in their online access even though they haven't offered Keogh plans for some time. This is simply a labelling failure by their backend office software. Administratively, there is very little difference between a Keogh and a Solo 401k. So their back office still works correctly for solo 401k plans. Their back end software must be some unmaintainable RPG code or something. How else do you explain their failure to correct a web site label or something useful like offer Roth 401k sub accounts.

              It was always the responsibility of the plan sponsor or their TPA  to perform administrative responsibilities such as Form 5500 filings. Which were required by Keogh plans, but only 5500-EZ filings are required of solo 401k plans when the balance >= $250K.

              Comment

              Working...
              X