401K Salt Lake City

Solo 401K Salt Lake City

If you are looking for any last minute tax planning ideas, look no further than a Solo 401K Salt Lake City UT.  Here is a brief summary of this robust tax deferral tool.

Available for business owners with no other full-time employees – Sole Proprietorships, Partnerships, LLCs and Corporations (S or C).

  • Employees under age 21 or who work less than 1,000 hours annually can be excluded.
  •  A husband and wife working in the same business can be considered as one owner.

Maximum annual employer contribution is:

  •  25% of owner compensation (salary) with employer and employee contributions not to exceed                    $49,000 (2011) $50,000 (2012) plus up to $5,500 for elective deferral catch-up contributions.
  • Self-employment compensation is 20% of Schedule C net earned income less half the self-                                     employment tax deduction.  Effectively, the 25% contribution is limited to 20% of net earned                             income before the owner’s contribution.

Contributions can be made after age 70 ½ but required minimum distributions must still be taken.

Maximum annual employee elective deferral (salary reduction) contribution is the lessor of 100% of                         compensation or $16,500 (plus $5,500 for catch-up if 50 or over).

As you can see some significant pre tax dollars can be deferred with this plan.  An additional added benefit is that the complexity of a regular 401K as it pertains to nondiscrimination rules are not applicable in a Solo 401K.

Areas of Service: 401K Salt Lake City UT, 401K South Jordan UT, 401K West Jordan UT

Leave a Reply