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Multiple 401Ks- W2 and 1099 from same hospital

Home Retirement Accounts Multiple 401Ks- W2 and 1099 from same hospital

  • Avatar kkann 
    Participant
    Status: Physician
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    Joined: 07/08/2019

    Couldn’t find the answer to this question in the posts/forum, hopefully not a repeat:

    Current job involves W2 income from medical director work AND 1099 income from shift work in the ER. Hospital offers a 401K with some matching. Currently have $19K employEE contribution from the W2 income and then 20% of net 1099 income going into a solo401K. My understanding is that each employER gets a separate $56K limit.

    To conform: for the W2 my employER is the hospital, and for the 1099 my employER is me, so I can theoretically put $19K (W2) + $56K (1099) = $75K away per year in 401Ks, correct?

     

    Thanks!

    #228714 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7748
    Joined: 01/09/2016
    To conform: for the W2 my employER is the hospital, and for the 1099 my employER is me, so I can theoretically put $19K (W2) + $56K (1099) = $75K away per year in 401Ks, correct?

    Click to expand…

    Yes, plus whatever the hospital matches at your W2 job.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #228734 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2069
    Joined: 03/01/2018
    so I can theoretically put $19K (W2) + $56K (1099) = $75K away per year in 401Ks, correct?

    Click to expand…

    yes with the caveat that the employer contribution to the solo k is limited to 20% of net self employment income which I’m sure you already know

    assuming that you exceed the social security wage base in W2 employment you would need $283,800 1099 profit (after deductible business expenses) to fund $56,000 in employer contributions to the solo k.

    and I admit that I don’t know if or how the QBI deduction plays into this.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #228743 Reply
    Liked by Peds
    Avatar Peds 
    Participant
    Status: Physician
    Posts: 3946
    Joined: 01/08/2016
    medical school scholarship sponsor

    After tax option?

    #228755 Reply
    Avatar spiritrider 
    Participant
    Status: Small Business Owner
    Posts: 1783
    Joined: 02/01/2016

    It is not likely. However, if you have ANY ownership interest in the hospital you would likely be part of an affiliated service group and unable to adopt a one-participant 401k.

    #228786 Reply
    Avatar kkann 
    Participant
    Status: Physician
    Posts: 2
    Joined: 07/08/2019

    Thank you, all!

    #228896 Reply

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