Solo 401k for a 1099-Misc? Short term only

Home Tax Reduction Solo 401k for a 1099-Misc? Short term only

  • Avatar taxisimpossible101 
    Status: Attorney
    Posts: 1
    Joined: 04/10/2019

    Hi Everyone,

    First of all, thank you in advance for your help (it is quite gracious of you to offer it), and I apologize for my ignorance.

    My wife has worked in a number of jobs this past year, and as a result hasn’t been able to open a 401k. However she worked for 6 weeks in a consulting capacity, for which she received a 1099-MISC. That “gig” has ended, and I’m not sure when/if she’d have another similar one. She has also received two other W-2’s this year for other jobs. We’re currently looking at about a $6k tax bill and were wondering if she could open up a solo 401k and contribute around 10k to that to lower our tax bill (and save for retirement).

    For added context, I believe our tax bill is due to our AGI being relatively “high” despite the fact that I owe 200k+ in debt, live in NYC and basically realize none of our income after paying rent and monthly student loan checks.

    Happy to answer any additional questions, and thank you all again- you’re quite generous to offer your wisdom, and I only hope I’m able to pay it forward similarly in the future.



    #205460 Reply
    jfoxcpacfp jfoxcpacfp 
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 7794
    Joined: 01/09/2016

    She can contribute to a solo-k only if she opened it before 12/31/18. Otherwise, she is limited to contributing 20% of her net profits to a SEP IRA, which she can then r/o to a solo-k. Unfortunately, she won’t be able to do the dollar-for-dollar matching of the 1st $19k afforded by a 401k.

    Backdoor Solo-401k plans

    Welcome to the forum!

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~ ~ [email protected]

    #205554 Reply

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