This handy, Solo 401k Calculator can help business owners determine the maximum potential contribution.
Self-employed individuals as well as businesses employing only the owner, partners and
spouses have a number of great options for tax-advantaged retirement savings. The most
popular are a Solo 401k plan, a SEP IRA, a SIMPLE IRA, or a Profit Sharing plan.
How do you know which allows you to contribute the most in your situation?
How much can you contribute into a Solo 401k, SEP IRA, SIMPLE IRA or a Profit Sharing Plan?
Each option has distinct features and amounts that can be contributed to the plan each year.
Use this Solo 401k Calculator to estimate the potential contribution that can be
made to a Solo 401k plan, compared to Profit Sharing, SIMPLE, or SEP plan.
When you own a business you wear two hats. Part of the
time you are working on the business and part of the time you
are working in the business. It’s no surprise then, that the
annual Solo 401k contribution consists of 2 parts: a salary
deferral contribution and a profit sharing contribution. The
total allowable contribution adds these 2 parts together to get
to the maximum Solo 401k contribution limit.
Although the term salary deferral is used, these businesses do not provide a W-2 salary to the business owner. For this type of business, the salary deferral contribution is based on net adjusted business profit. Net adjusted business profit is calculated by taking gross self employment income and then subtracting business expenses and then subtracting 50% of the self employment tax.
A profit sharing contribution can also be made up to 20% of net adjusted businesses profits. You will want to ask your tax professional for assistance with this calculation.
100% of W-2 earnings up to the maximum stated amount according to IRS tables including catch up for those 50 years or older.
A profit sharing contribution up to 25% of W-2 earnings can be contributed into a Solo 401k.
Nothing provider here constitutes tax advice. Individuals should seek the advice of
their own tax advisor for specific information regarding tax consequences of investments.
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Through this policy and its underlying procedures, Celestial Wealth Management attempts to secure the confidentiality of customer records and information and protect against anticipated threats or hazards to the security or integrity of current and former clients’ records and information. We want you to know what information we collect and how we use and safeguard that information.
We collect certain nonpublic information about you (“Customer Information”). The
essential purpose for collecting Customer Information is to allow us to provide advisory services to you. The types of personal information we collect and share depend on the product or service you have with us. This information can include:
We restrict access to your nonpublic personal information to those employees who need to know that information to provide products or services in furtherance of the client’s engagement with Celestial Wealth Management. We maintain physical, electronic and procedural safeguards that comply with applicable federal or state standards to protect your nonpublic personal information.
We collect your personal information, for example when you
We may disclose the client’s information for our everyday business purposes:
If you have questions about this privacy notice or about the privacy of your customer information call (443) 438-7211 or visit http://www.celestialwm.com and ask to speak to the Chief Compliance Officer