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How much money can I put into different 401k accounts in a given year?

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  • How much money can I put into different 401k accounts in a given year?

    Context: I'm an independent contractor filing as a s-corp and have an individual 401k I max out annually (18K.)

    In February, I'm buying 50% of a business and will no longer be eligible for my individual 401k. I will however become eligible for the business sponsored 401k which I can begin to max out in 2018.

    Question: Can I max out my individual 401k before I buy in and then max out the company's 401k,...both in 2018?

    If not, important to note that my solo 401k has a Roth 401k option. I've not yet made any Roth 401k contributions in the past. Can that be maxed out with after tax money prior to it being phased out, and then still max out the company's 401 both in 2018k?

  • #2
    You can only make an employee contribution in one 401(k). You can have employer contributions from multiple 401(k)s if they are unrelated businesses.

    Full details in WCI post on the topic of multiple 401(k)s.

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    • #3




      You can only make an employee contribution in one 401(k). You can have employer contributions from multiple 401(k)s if they are unrelated businesses.

      Full details in WCI post on the topic of multiple 401(k)s.
      Click to expand...


      That's not what the WCI post says.  You can divide the employee limit among multiple 401(k)'s.
      I sometimes have trouble reading private messages on the forum. I can also be contacted at Li[email protected]

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      • #4
        I think he means he can only make a *full* employee contribution ($18,000 elective deferral) to one 401(k).

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        • #5
          Can I make Roth 401k contributions in my individual 401k and then tax-deferred contributions to my company 401k later in the year?

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          • #6




            Can I make Roth 401k contributions in my individual 401k and then tax-deferred contributions to my company 401k later in the year?
            Click to expand...


            Yes, only $18,500 total for 2018 (if under 50).
            Helping those who wear the white coat get a fair shake on Wall Street since 2011

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            • #7


              That’s not what the WCI post says.  You can divide the employee limit among multiple 401(k)’s.
              Click to expand...


              OK, I'll give you that, but if you max one out, you're done. As @DMFA points out, you're limited to the $18,000 (or $18,500 next year) in employee contributions.

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              • #8
                Now as an employer and employee in my individual 401k does that allow me more options to contribute?

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                • #9




                  Now as an employer and employee in my individual 401k does that allow me more options to contribute?
                  Click to expand...


                  You can contribute up to 20% of net profits (earnings minus expenses minus half self employment tax) if sole prop or 25% of W-2 wages if S-corp as employER "profit-sharing" to your individual 401(k). These are *not* part of your $18,000 ($18,500 for 2018) for elective deferrals, aka employEE contributions. The limit per unrelated employer's 401(k) is $54,000 ($55,000 for 2018). This can come into play if you're a part owner in your employed job.

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                  • #10




                    Context: I’m an independent contractor filing as a s-corp and have an individual 401k I max out annually (18K.)

                    In February, I’m buying 50% of a business and will no longer be eligible for my individual 401k. I will however become eligible for the business sponsored 401k which I can begin to max out in 2018.

                    Question: Can I max out my individual 401k before I buy in and then max out the company’s 401k,…both in 2018?

                    If not, important to note that my solo 401k has a Roth 401k option. I’ve not yet made any Roth 401k contributions in the past. Can that be maxed out with after tax money prior to it being phased out, and then still max out the company’s 401 both in 2018k?
                    Click to expand...


                    Actually, just because you buy only 50% of the business, this does NOT make it a controlled group, unless the other 50% partner is a relative/spouse or someone who provides you with the 1099 income in the first place.  So if your 1099 income is unrelated to the business you are buying, you might be able to keep your solo 401k plan as it was.

                    So that's the first question to address - do you have a controlled group situation?  If the answer is that there is no controlled group here, then you can put $55k into your solo 401k and another $55k into the 2nd business (provided they have an appropriately designed retirement plan).  Yes, the $18k would be in common, but that's not the big concern here, it is the controlled group question.
                    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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