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Updated almost 11 years ago on . Most recent reply presented by

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12
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P Joshi
  • San Jose, CA
0
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12
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Can you make deductible IRA contributions if you have solo 401k

P Joshi
  • San Jose, CA
Posted

This IRS page mentions that limits are subject to coverage under employer plan.

[url]http://www.irs.gov/Retirement-Plans/Are-You-Covered-by-an-Employer%27s-Retirement-Plan%3F[/url]


What if you are not covered by typical employer plan but if you have a self directed 401k / solo 401k (one member 401k plan for a self employed person)? Are you still prevented from IRA deduction similar to large employer 401k members?


Problem is that for new self-employment gig, schedule C income may be small and so retirement contributions to solo(k) (roughly max 25% of schedule C income) would be tiny. But, income from non-schedule C sources could be enough to make a deductible 5k contribution to IRA. But, if solo 401k is treated as W-2 employer plan, not much retirement contribution can be made either to IRA or solo(k).

Any clarification?

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