Is it still possible to set up a solo 401k for a sole proprietor.
I thought someone had told me that under the Cares Act there was additional time to do so.
ManVsTax wrote:The EE portion can be made by the due date of the return including extensions as well.
The client just needs to elect to make the EE deferral by year-end, not actually transfer the cash.
The client just needs to elect to make the EE deferral by year-end
Employee Contributions
Participants may be permitted to make nondeductible contributions to a plan in addition to your contributions. Even though these employee contributions aren't deductible, the earnings on them are tax free until distributed in later years. Also, these contributions must satisfy the actual contribution percentage (ACP) test of section 401(m)(2), a nondiscrimination test that applies to employee contributions and matching contributions. See Regulations sections 1.401(k)-2 and 1.401(m)-2 for further guidance relating to the nondiscrimination rules under sections 401(k) and 401(m).
When Contributions Are Considered Made
You generally apply your plan contributions to the year in which you make them. But you can apply them to the previous year if all the following requirements are met.
You make them by the due date of your tax return for the previous year (plus extensions).
The plan was established by the end of the previous year.
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