PARTIAL YEAR Individual 401K if employed part of the year?
I have been self employed for 10 years and expect to be hired back by someone starting April 1st. Besides the trepidation of going back under the yoke, I have questions about whether I can still make contributions to my Individual 401k for the period of time I was self employed during the year and not eligible for an employer sponsored retirement plan. If so, what are the limits I should use?
Can anyone help?
Permalink Submitted by mk foss on Mon, 2009-03-09 02:21
As long as you don’t become a 2% owner of the new company, there would not be a significant difference. The 401l elective deferral limit is $16,500 for 2009 – you cannot exceed that limit with two employers. But you would have an overall limit – deferral plus “employer” contribution limitation of $49k for 2009 from your self employment.
Congratulations on finding someone to pay some of the social security and Medicare taxes on your behalf.
Permalink Submitted by Katherine L. Maxwell on Sun, 2017-07-02 17:19
Client was terminated June 30, 2017. Salary for that period was $74,000 and 401k contributions were $6772. (Numbers rounded) His severance package includes same salary for the rest of year. He cannot contribute to his 401k as he is no longer an employee.1) Can he contribute to his IRA the rest of the year?2) If so, how much?Kay
Permalink Submitted by Alan - IRA critic on Sun, 2017-07-02 18:16
He can contribute to a TIRA, but his modified AGI might be too high to deduct the contribution. If that is the case and if his income is not too high for a Roth contribution, the Roth would be preferable to a non deductible TIRA contribution. He can contribute 5500 (6500 if age 50 plus) to a TIRA or Roth IRA if MAGI is not too high for the Roth contribution.