The plan was originally created back in 2016 or so. It was "restated" in 2022 when she upgraded from a free retail plan with one of the major brokerages to a custom plan with Discount Solo 401k. I created my sole prop last year (2023) and contributed to it the same year.When did your wife open the plan?I recently came across a list of tax credits available for retirement plans and would like to see if one in particular, the Employer Contribution Credit, might be available for the plan my wife and I use.
https://www.asppa.org/news/where-credit ... -secure-20
My wife grosses about $300k and pays herself a salary around $140k and a K-1 income of around $80k. I have a full-time W-2 job, and I recently started a sole proprietorship, where I get 1099 income from my wife's business and a couple other clients, around $10-20k. My business is an affiliated business with her plan, and last year I opened up my own accounts under her plan and contributed 100% of my net income as Mega Backdoor Roth.
I haven't found any rules anywhere that would preclude me from taking advantage of this credit. My wife's wages would phase her out of this credit, but I don't see anything that would preclude the credit for me. While I have been contributing 100% after-tax contributions, 20% of net business profit (employer contributions) would be more than the $1,000 limit. Is there anything I'm missing?
Statistics: Posted by bismarck23 — Fri Apr 26, 2024 6:41 pm — Replies 3 — Views 286