Individual 401k setup through LLC or SS#
90% member in a LLC wants to setup an Individual 401k – no employees. Member has guaranteed payments and income flow-through from 1065 K-1 from LLC BOTH considered self-employment income.
Should the Individual401k be setup in the LLC’s name and EIN or the Individual ss#. – Worried about potential need to include the other partner in the profit sharing portion.
Permalink Submitted by W Hunter Robinson on Tue, 2009-12-22 03:11
looks like 401(c)(4) says its gotta be in the partnership name.
Permalink Submitted by mk foss on Tue, 2009-12-22 22:33
Hopefully, whoever sets ups the 401k plan for the LLC will provide enough information for the plan to be qualified. The other partner will need to be notified of the plan, have the ability to defer self-employment income and share in the profit sharing contribution. There is also “testing” required that could affect the amount or percentage of deferrals for the 90% member.