Roth Individual/Solo 401(k) contributions
Hi,
For self employed clients that make employee and/or employer Roth contributions into their individual/solo Roth 401(k) plans, do those contributions need to be noted anywhere on the person’s tax return? Or are those not noted anywhere since their is no associated tax deduction for the employee/employer.
Permalink Submitted by William Tuttle on Sat, 2024-02-24 02:50
Roth 401k employee deferrals are not directly reported on a tax return for a self-employed individual. However, if meeting the AGI requirement, they could be used for the Saver’s Credit.
While the IRS released Notice 2024-2 on 12/20/23. This notice by Q&A addressed certain characteristics of SECURE Act 2.0 Section 604 (Roth Employer contributions). All of them were for W-2 employees. None were fore self-employed individuals. For W-2 employees, Roth employer contributions will be reported on a Form 1099-R, with no income tax withholding or FICA taxes.
The deadline for adopting SECURE Act 2.0 401k plan amendments is 12/31/2026.
One-participant plan providers may or may not adopt these amendment for 2024.
It is likely premature to worry about how these might be reported on especially self-employed tax returns.