website - An Overview

People are rushing to finish their 2013 tax year return and asking yourself how they can save tax for the 2014 tax year. The Solo 401( k) is a technique that few use. The Solo 401( k) is not a new kind of 401( k) strategy as well as has the exact same policies as well as demands as any type of various other 401( k) strategy.

The business proprietor uses two hats in a 401( k) strategy: worker as well as employer. Contributions can be made to the plan in both capabilities.

The 2nd part is the company payment of up to either 25 percent of the compensation specified by the plan, normally salaries, or a various calculation for the freelance person. If the individual is age 50 or over, there can be an added $5,500 "catch-up" payment, making the total maximum payment to the Solo 401( k) intend $56,500 for 2013 and $57,500 for 2014.

Instance of a Set up C, unincorporated small company, where the proprietor is at least age 50 as well as the web earnings in 2014 is $200,000:

If one takes 20 percent of $190,067.85, the maximum company earnings sharing payment is $38,013.57. In comparison, the payment limitation for an EASY IRA plan would certainly be $20,035.96 or $38,013.57 for a SEP Individual Retirement website Account plan. One can contribute substantially even more to a Solo 401(k) rather of these other two company Individual Retirement Account plans, and absolutely a lot more than the $6,500 restriction for a typical individual IRA strategy.

Due dates: One must develop your Solo 401(k) strategy by December 31, 2014, if you want to make a payment for tax year 2014 and lower taxable income. The payments should be funded by your tax-filing target date. If one declare the 6-month extension prior to the April 15, 2015 due date to submit one's 2014 income tax return, one would certainly have until October, 15, 2015, to make the cash money contribution.


The Solo 401( k) is not a new kind of 401( k) plan as well as has the very same guidelines and also requirements as any type of various other 401( k) plan. The organisation owner puts on two hats in a 401( k) plan: staff member and employer. If the person is age 50 or over, there can be an extra $5,500 "catch-up" contribution, making the overall maximum payment to the Solo 401( k) prepare $56,500 for 2013 as well as $57,500 for 2014.

One can add substantially even more to a Solo 401(k) rather of these other 2 company IRA strategies, and also certainly much even more than the $6,500 restriction for a traditional private IRA strategy.

Deadlines: One should establish your Solo 401(k) plan by December 31, 2014, if you desire to make a contribution for tax year 2014 as well as lower taxable income.