Max funding for sole proprietor
Tried a quick search and found some relevant threads but am still unsure – how much could a sole-proprietor add to their retirement plans in 2015? I’d like to know the absolute maximum and how they would do it, meaning which plans to use, etc. Assume over age 50. thanks, -m
Permalink Submitted by mk foss on Wed, 2015-01-14 01:35
The largest amount that a sole proprietor could put in a SEP or qualified plan is $53,000 in 2015.If a SEP is used, that’s the limit whether at age 50+ or not.You apply 20% to the Schedule C profit reduced by the one-half of SE tax that you deduct on page 1 of Form 1040.If you’re using a 401k plan – $24,000 of the $53K can be made by deferrals during the tax year – you use the same formula (20% of profit reduced by 1/2 SE tax) to get the other $29K. If the sole proprietor was under 50, the deferral amount is only $18,000.
Permalink Submitted by Bruce Steiner on Wed, 2015-01-14 04:12
It may be possible to put in more than $53,000 with a defined benefit plan. An actuary could tell you how much you could contribute to a defined benefit plan
Permalink Submitted by [email protected] on Wed, 2015-01-14 14:12
great. thanks to both. – m