Can I use a Solo 401k to reduce my taxable W2 income?

[Jack B.]

I have a full time job and rental properties. I'm looking for ways to reduce my taxable and am looking into whether 1) I qualify for a solo 401k as a landlord and 2) whether it will help me reduce my taxable income. Is there anyone here that does this or has looked into this?

[Dmitriy Fomichenko]

@Jack B.

In order for you to qualify and establish a Solo 401k plan you need to meet following criterias:

• Generate self-employment income or own a small business
• You can not have any full time common law employer working for your business except you and your spouse.

The income from your rental properties is considered 'passive' (you need active, earned self-employment income). Let's suppose you had that income, in this case contributions to your Solo 401k plan can be made from earned SE income, you can not use your W2 income to contribute into Solo 401k.