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Updated about 1 year ago,
Solo 401k contribution help
The IRS link- https://www.irs.gov/retirement-plans/one-participant-401k-pl... mentions, "The one-participant 401(k) plan isn't a new type of 401(k) plan. It's a traditional 401(k) plan covering a business owner with no employees, or that person and his or her spouse. These plans have the same rules and requirements as any other 401(k) plan.".
I am confused about this and want to get some expert opinion here if this means that the contributions can be essentially doubled by the spouse participating in the plan.
The scenario:
Wife has a daytime job W2 making 80k and has made 10k in 401k contributions at her work place, Husband is full time into real estate reno business(LLC has only wife's name on it) and the business made 100k in profits last year.
If wife can make 12.5 k in Solo 401k contributions(10k already went to 401k through her day time job) and another 25k (25% of 100k), what steps can be taken that can allow the husband make an additional 22.5k as well as 25%?
Thank you