solo 401K

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  • Avatar san 
    Status: Physician
    Posts: 2
    Joined: 02/11/2019

    I am planning to open solo 401 k with Roth . I do have a solo 401k which does not have that option. Should I open new i401k and transfer from old one and close the old i401k or transfer that to IRA and close it. Either one is Ok as afar as I am concerned.

    Also for the purpose of solo 401k EIN is needed for most. Should the locum open a business account with EIN and receive money through that or can they receive in personal account and EIN only for solo 401k purposes but essentially not using for anything else.

    I tried to find answers but unable to get clear picture.



    #189847 Reply
    Faithful Steward Faithful Steward 
    Status: Financial Advisor, Small Business Owner
    Posts: 439
    Joined: 06/12/2017

    You should transfer the old 401(k) into the new one or leave it where it is. The last thing you want to do is roll it over into a Rollover IRA which would cause issues with the IRS pro rata rule on Roth Conversion if at some point you are wanting to do Backdoor Roth.

    Michael Peterson, CFP® | Faithful Steward Wealth Advisors | (717) 496-0900

    #189889 Reply
    Avatar spiritrider 
    Status: Small Business Owner
    Posts: 1793
    Joined: 02/01/2016

    Keep in mind that a 401k is not just a bigger IRA account. Your business can not sponsor more than a single one-participant 401k at the same time.

    Once adopted the one-participant 401k plan belongs to the sponsor not the record keeper and custodian. Unlike with a previous employer, you can not just rollover your assets. Your 401k plan must first change to the new document/provider.

    To change one-participant 401k plan providers; use the new provider’s adoption agreement to amend the 401k plan to the new plan document/provider, open 401k account(s) under that plan, do a trustee -> trustee transfer from the old custodian to the new custodian, close the old 401k account.

    You do not terminate the old 401k plan, because there is no old 401 plan. The same 401k plan has simply been amended.

    #189905 Reply
    Avatar san 
    Status: Physician
    Posts: 2
    Joined: 02/11/2019
    Earnest refinancing bonus

    Thanks. Also EIN do I need to receive 1099 income to EIN or can I receive with my social security Tax ID also because of solo 401K.


    #190026 Reply

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