Articles on Stock markets

News, Research and Analysis

Help Center
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement Accounts401(k) and 403(b) PlansIndividual Retirement Accounts (IRA)SEP and SIMPLE IRAsKeogh PlansMoney Purchase/Profit Sharing PlansSelf-Employed 401(k)s and 457sPension Plan RulesCash-Balance PlansThrift Savings Plans and 529 Plans and ESA
Personal Finance
Corporate Basics

If I Want to Establish a Self-Employed 401(k), Do I Have to Establish One for All Owners of My Business?

This may be something you have to ask a CPA or tax attorney, but generally the answer will be yes. Some institutions will not allow you to open a self-employed 401(k) if you have more than one owner in the business, but by statutory definition these plans can be set up for partnerships.

If you are part of a partnership and this is where your self-employed income is made, you will be getting on thin ice if you attempt to form an LLC for yourself as a conduit for the money, just so you can have a self-employed 401(k), because, while that is not recommended, it will be about your best chance of setting up a Solo K that does not include your partners.

As far as the IRS is concerned, partners are part of a business, and cannot set up their own qualified plans. If Profit Sharing contributions are made to a Self-Employed 401(k) Plan, then they have to be made proportionally to the percentage of ownership for all business owners or shareholders of a Limited Liability Company (LLC).

Keywords: taxation, retirement accounts, employee benefits, self-employed, self-employed individuals,