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Hypothetical Scenario - Self-Directed Solo 401k - Is it allowable?
Posted on 5/29/19 at 8:56 am
Posted on 5/29/19 at 8:56 am
I've got a 9-5 job that enables me to save $1,000/month and I own a single member LLC that generates $1,000/month in net income before taxes. The LLC has a Self-Directed Solo 401k plan.
Can I use my $1,000 9-5 savings to pay my LLC for some services and thereby increase my contributions to the 401k? Can I otherwise use the 9-5 savings to contribute to the 401k?
Assume that the services are legitimate, if possible.
If anyone has experience in a similar situation or with a Self-Directed Solo 401k plan in general I would love to hear your thoughts or your particular situation.
Can I use my $1,000 9-5 savings to pay my LLC for some services and thereby increase my contributions to the 401k? Can I otherwise use the 9-5 savings to contribute to the 401k?
Assume that the services are legitimate, if possible.
If anyone has experience in a similar situation or with a Self-Directed Solo 401k plan in general I would love to hear your thoughts or your particular situation.
This post was edited on 5/29/19 at 8:58 am
3
Posted on 5/29/19 at 9:25 am to OMapologist
Couple of links here on Solo 401ks LINK
The finance buff has an excel sheet somewhere on his page where you can plug the numbers in. You have to take some precautions with estimated taxes and contributions to your main 401k.
The finance buff has an excel sheet somewhere on his page where you can plug the numbers in. You have to take some precautions with estimated taxes and contributions to your main 401k.
Posted on 5/29/19 at 9:39 am to OMapologist
I have a solo 401k myself. so you are basically saying you want to up the single member LLC income BY USING your day job so when you contribute to the 20% after expenses owner profit sharing side you will have X amount of dollars? Because from the employee side 19k is 19k. there is nothing over that unless you are over 50 and use catch up contributions. As far as paying the LLC from your day job a CPA here could help you like lsufaninhouston. he knows about these.
This post was edited on 5/29/19 at 9:52 am
Posted on 5/29/19 at 10:25 am to OMapologist
I am assuming that the money from your 9-5 job has already been taxed. If that's the case, I don't think I would want to increase my LLC income just for the ability to put money in a tax deferred 401k.
But, yes you could do this, as long as you do not exceed the maximum 401k limits. You could also do the profit-sharing match.
But, yes you could do this, as long as you do not exceed the maximum 401k limits. You could also do the profit-sharing match.
Posted on 5/29/19 at 10:35 am to tigerrocket
Posted on 5/29/19 at 12:11 pm to tigerrocket
quote:
I am assuming that the money from your 9-5 job has already been taxed. If that's the case, I don't think I would want to increase my LLC income just for the ability to put money in a tax deferred 401k.
good point. for some reason i am thinking of him moving what would be pre-tax to another pre-tax. yeah if he is an employee that kinda defeats the purpose if already taxed it would seem.
Posted on 5/29/19 at 12:25 pm to Fat Bastard
Oh, shite. I was thinking this was 1099, un-taxed money.
Posted on 5/30/19 at 10:01 am to tigerrocket
Probably should have realized that. Thanks.
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