401k.Profit Sharing Plan.SEP IRA
Sole proprietor has a uni/solo 401(k) with a profit sharing component.
He is now an employee of a company with a 401(k) plan and match, however will still have “self employment” income.
Can he contribute to his uni/solo 401(k) profit sharing plan as a profit sharing contribution (not salary deferrals) or is it better to open a SEP IRA.
Thank you.
Permalink Submitted by William Tuttle on Fri, 2017-06-16 20:08
There is no difference between the allowed employer contribution with a SEP IRA and a one-participant 401k. The SEP IRA is marginally easier to setup and administer. However, SEP IRA contributions will interfere with backdoor Roth contributions and the 401k will not.