Self Directed 401k

[Kenneth Shultz]

I need some help with thinking through the self directed 401k. I have two side business: (1) professional service firm, and (1) real estate investment company. Both are new companies, and in their infancy. I do not take much out as compensation, because I want the companies to thrive.

I am also a licensed professional engineer, and work for a company and receive a W2 from that company. I use my income to fund and start my other businesses. My question is: am I able to use my income from my employer to make contributions to a self directed 401k plan that is set up by my side business?

Thank you!

Kenny

[Justin Windham]

@Kenneth Shultz

@Kenneth Shultz@Rajeev Kotyan is correct that you cannot contribute your W2 wages from employment directly to your Solo 401k plan, however @Daniel Dietz is also correct that you could contribute your W2 wages to an IRA and that can be transferred to the Solo 401k. If your employer offers a 401k, you can contribute more to this than you can an IRA, but those funds may be locked into that plan until you leave that employer. In that case, you could transfer the 401k funds to your Solo 401k after you no longer work at that job.