Single person 401k
I have a S corp single person taking $120k in salary. How much can they put into solo401k for 2010. They did not defer any salary throughout the year. Thoughts?
Thanks!
I have a S corp single person taking $120k in salary. How much can they put into solo401k for 2010. They did not defer any salary throughout the year. Thoughts?
Thanks!
Permalink Submitted by Peter Lingane on Fri, 2011-03-11 23:15
Probably zero for 2010 since the 401(k) must be established before the end of the tax year.
If the 401(k) was in place before the end of the tax year, the individual cannot make an elective deferral in March 2011 because the deferral election must be made before the salary is paid.
The plan may require the corporation to contribute 20% of salary (or other amount) but I’m not sure as to the deadline for the employer contribution. It is probably the due date of the corporate return.