Solo 401(k) Services in Seattle, WA
Overview Of A Solo 401(k)
A Solo 401(k) is used by self-employed individuals with no employees other than a spouse. A Solo 401(k) is easy to set up and maintain and allows for the deferral of up to $66,000 of income per year. While a SEP allows for a deferral of up to 25% of income, a Solo 401(k) allows for an employer contribution up to 25% of income as well as employee contributions up to standard 401(k) limits, meaning overall you are not limited to 25% of income.
Primary User Of A Solo 401(k)
Self-employed individual or business with no employees other than a spouse
Available to sole props, partnerships, LLCs, C corps and S corps
Advantages Of A Solo 401(k)
Potentially higher contribution limits than SEP IRA
Wide range of investment choices
Who Can Contribute To A Solo 401(k)
Funded by employee deferrals and employer contributions
2023 Employer Contribution Limits
Employers may contribute up to 25% of compensation up to a maximum of $66,000
Total employer / employee contributions cannot exceed $66,000
2023 Employee Contribution Limits
Up to $22,500 in salary deferrals; $29,000 if age 50 or older
Admin Responsibilities
Annual Form 5500 filing after plan assets exceed $250,000
Access to Assets
Cannot take withdrawals from the plan until a "trigger" event occurs, such as turning age 59.5, disability or plan termination
Plan Set up Deadlines
Establish by December 31 (or fiscal year end)