The much higher Solo 401 k contribution 2015 is one of the indicators that make the Qualified 401 k retirement plan different from other pension plans in the industry. The Self 401k offers a higher maximum contribution which is 10 times higher compared to Traditional or IRA plans. There are plan providers that offer helpful resources to their plan participants such as a 401 k calculator. This tool helps plan owners know their allowed maximum contribution and calculate their retirement savings in the long haul.
Knowing the Solo 401 k Contribution 2015
The up-to-date maximum contribution of the Individual 401k plan depends on the type of contribution the plan participant elects. The age of the plan owner can also affect his total annual contribution. For instance, the two main types of contribution are Employee Deferral and Profit Sharing. Plan participants who are 50 years old and older are also entitled to a catch-up contribution of $6,000.
The maximum Solo 401 k contribution 2015 in this contribution elective is $18,000 for those under 50 years of age. However, age-qualified plan owners can contribute up to $24,000 in an annual basis. This amount includes the allowed $6,000 catch up contribution.
The kind of business you operate and own mainly determines the amount of the Solo 401 k contribution 2015. Businesses that are sole proprietorship or single member LLC in nature can contribute 20% of the self-employment compensation while multi-member LLC or corporations may contribute up to 25% of the overall compensation. With the combined catch-up contribution for eligible participants, the total annual maximum contribution for profit sharing is up to $59,000. The business owner’s spouse can make the same contribution to the same retirement plan which allows them to make up to $118,000 maximum yearly contribution.
Plan participants should elect the type of contribution they prefer until the 31st of December of the current year. Contributions must be made until the tax filing deadline of the following year, usually during the month of April for sole proprietorships and LLC’s. Corporations have until the business tax filing deadline on March 15.
Complying with the Solo 401 k contribution 2015 is one of the basic steps of maximizing the Solo k retirement plan and all its benefits. Your retirement savings are higher due to the higher allowed contribution limits. Plan participants enjoy the retirement plan for self-employed individuals especially the easy ways to access your retirement money for income generating investments.
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