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Question about Keogh for Self Employed

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  • Question about Keogh for Self Employed

    In 2020 I started a side gig for the first time paid as an independent contractor (1099-NEC). I opened a self employed profit sharing Keogh at Fidelity. I obtained an EIN for that plan. Now I'm sitting down to do my taxes and I'm confused and hoping I didn't make a big mistake. My 1099-NEC has my own personal social security number. Is it a problem that it does not have the EIN that I obtained to open the Keogh? I funded it to the max and have been trading in that account. I'm really hoping I don't have to unwind my Keogh and pay tax on the contributions or something.

  • #2
    Did the entity paying you even have your EIN? They may be obligated to put your individual social on the 1099. I don’t think that’s relevant from a contribution perspective. You’ll reconcile this on your Schedule C and QBI deduction. You’ll also provide your 1099 to the IRS so they can verify. I wouldn’t sweat this.

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    • #3
      No they didn't have my EIN. I'm gathering from replies in another forum (and yours) that that is a non-issue. Thanks. As an aside, how does the IRS know that I actually did make these contributions?

      Edit: I guess Fidelity will provide the IRS that info.
      Last edited by lincolntunnel; 02-21-2021, 01:53 PM.

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      • #4
        Originally posted by lincolntunnel View Post
        No they didn't have my EIN. I'm gathering from replies in another forum (and yours) that that is a non-issue. Thanks. As an aside, how does the IRS know that I actually did make these contributions?

        Edit: I guess Fidelity will provide the IRS that info.
        You’ll also account for this on Schedule 1, Part II.

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        • #5
          You did not adopt a Keogh plan at Fidelity. You adopted their "Self-employed" 401k plan, a marketing term for a "one-participant" 401k plan.

          A Keogh plan is a legacy self-employed qualified plan from the 60s. It has largely been superceded by the one-participant 401k plan over the last 15 - 20 years.

          It is just that Fidelity's back office still refers to it as a Keogh plan, but it is operationally a one-participant 401k plan.



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