Solo 401 K Options Available for Self-Employed
The Solo 401k is experiencing a rise in popularity as many learn of its advantages and benefits. What may come as a surprise to many is the ability to qualify for the plan while still employed at a traditional business company.
The Solo 401 K options available to employees
With the current downturn in this side business affords a powerful advantage that many are unaware of: it may qualify a person for the Solo 401k plan. The one thing that most people are unaware of it that you can adopt a solo 401k plan for the business and still maintain the contributions for on your full time job. What this accomplishes, is that a person can maximize the contributions that they make to their 401k. There are however two conditions that you will have to fulfill before you can do this; you will have to prove the presence of the business activity and as well as prove that your business activity doesn’t have full time employees.
How your business can help with your solo 401 K options
A Solo 401k can be adopted by your business, whether it is a Sole Proprietorship, an LLC, a corporation . As long as the staff is employed on a part time basis, meaning that they work only 1000 hours annually, your side business may allow you to qualify for the Solo 401k.
There are however a few limits that come with your yearly contributions to a solo 401 k options. The maximum allowable contribution for this year is $51,000 and an extra $5,500 should you be above the age of 50. If your employment contributions are less than the maximum allowable amount, then your Solo 401k with your side business can help you contribute the remainder and make sure that you fully maximize your 401k contributions for any given year. And the 401k may even come in handy when you want to expand the business or make alternate investments because you can take out a loan from the Solo 401k plan and use the funds to further grow the business.