Solo 401k Plans For Self-Employed Business Owners

A Solo 401k is a retirement plan for self-employed individuals or business owners with no other employees. This employer sponsored plan allows the business owner's spouse to participate in the plan. This plan allows high contribution limits. Both employee and employer contributions are allowed, helping the business and the owner lower their taxable income. 

This plan is also known as Individual 401k, Self-employed 401k, Personal 401k, and One-Participant 401k.

 

To open a Solo 401k you must have earned income from a business with no employees. You will need an EIN for the Solo (k), an EIN for the business, a checking account, and a compliant recordkeeping platform. You do not need an LLC unless that is part of your investment strategy. 

The contribution deadline for a Solo 401k is usually the employer’s tax return due date plus extensions. For corporations, employee contributions must be deposited within 7 business days after each payroll period. Contributions can be made by both the employer and employee. Since this plan is considered an owner-only plan by the IRS, the employee is also the owner.

The District of Columbia's Emancipation Day holiday sometime falls around the same time, and the tax deadline is pushed out a few days for sole proprietors and C-Corporations.