(The following is the fourth of a special five part series meant to be shared by professionals and non-professionals alike. This particular series covers
only one of the 7 Deadly Sins Every ERISA Fiduciary Must Avoid.)
It’s 2018, and it’s time for you to start thinking about maximizing your contributions to your Solo 401k.
The new limit is $55,000 or $61,000 if you are over 50.
The maximum elective deferral, aka Employee Contribution, for 2018 is now $18,500, or $24,500 if age 50 or older.
The profit sharing portion, aka Employer Contribution, cannot exceed $55,000 for 2018.
If your business is set up as a Corporation, the max profit sharing contribution is 25% of gross income and is still subject to the above profit sharing amounts.
If your business is set up as a Sole Proprietor or Partnership, the max profit sharing contribution is 20% of net income and is still subject to the above profit sharing amounts.
If you decide to take the full $18,500 for the elective deferral, you are limited to making $36,500 in profit-sharing contributions so that your contributions do not exceed $55,000 (or $61,000 if 50 or older).
As always, there are no limits on the amount that you can rollover or transfer from another retirement account.
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