Hello and thanks for your tax question.
Thank you as well
Your maximum contribution to a retirement account that has an SEP component is limited to 20% of the net income from the activity.
You will not be able to eliminate the entire 2500 balance due at this point
Your max contribtion is20% of 3313 if that is the NET profit
I see, so I can only count the profit from my personal business, not that of my salaried job.
I'm assuming you are not self employed for that W-2 income
(i.e. you own your own S-Corp)
Correct I have a day job
I borrowed against this solo 401K as soon as I opened it. I'm assuming I need to report that as income?
You MIGHT be able to contribute up to the full 3313, but I would also need to know if you have a 401k at the wage job
Borrowed money is NOT taxable income
I did not have a 401K at my wage job in 2012
Paying it back is NOT deductible
This is very helpful. Wish I had found this website sooner. Ok, so what do I need to tell the IRS?
Just making sure you got my last question
If you want to contribute to the SoloK, you must make your contribution within the next 10 minutes,
Otherwise it is too late for 2012
I do not plan to contribute to the solok in the next 10 minutes. So at this point I just want to make sure I report what is necessary so that the IRS does not come knocking
so, realistically, it is too late.
If you did not get a 1099-R form, there is nothing to report
I put 12K into it in Dec 2012
To be honest, I don't recall if I did or did not get the form. I have looked in my papwork and don't see anything.
Houston, we have a problem.
Yes in Dec 2012, I rolled over funds from an IRA into the Solo 401K - I created it in dec 2012
humor - I need that :-)
If you rolled funds over, then it is NOT a new contribtion, then NO problem
forgive my ignorance, but what do you mean by "contribution"
Interesting update: I created this solo 401K in Dec but I show the deposit of the rollover funds from Key Bank to be 2/5/2013. Any advice on this?
Are you still assisting me or did I lose you?
I am here
has no effect on anything
Ok - happy to botXXXXX XXXXXne this. What do I need to reflect to ensure the IRS is happy. I'm sure they would want to know I rolled this over and created a solo 401K and pulled out 6K even if it's not income, correct? I'm using TurboTax and at a standstill.
The rollover occurred in 2013 so it is reported in 2013
no deduction allowed for 2012
no income either from IRA
Ok. I guess that's that then. The person who talked me into the solo 401K eluded that I could write off all sorts of things as a result of doing this. I didn't realize he was referring only to the income earned in my network marketing business. He failed to add that point.
Any other nuggets of advice before I rate you Excellent?
That's OK. ... Thank you!
You now know that the max contribution for new money is 20% of the net income
From the personal business only, correct
But the 401k element allows dollar for dollar to 15.5K
Note to self: next life - marry a CPA LOL
have a good evening!
I married a CPA - sheknows nothing about tax
Thank you LOL have a great rest of the night. Love this site. Connect with me on LI www.linkedin.com/in/raeganhill