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Bill, Enrolled Agent
Category: Tax
Satisfied Customers: 3151
Experience:  EA, CEBS - 35 years experience providing financial advice
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I am currently self employed and have a self funded 401K and

Resolved Question:

I am currently self employed and have a self funded 401K and wish to make contributions for this year. However, I am planning to take a full time offer with a company starting this month (this company has a 401k plan). Will I still be able to make contributions to my personal 401k for this tax year ?
Submitted: 7 years ago.
Category: Tax
Expert:  Bill replied 7 years ago.

Yes, you can still make contributions to your individual 401(k) plan for this year assuming you file a Schedule C as a sole proprietor. You will want to complete an elective deferral form for your files designating the amount that you wish to defer even though you may not make the contribution until next year. However, the total combined elective deferral amounts (to both plans) that you can make for the year are limited to $15,500 ($20,500 if age 50 or older). So if you contribute $15,500 (assuming you are under age 59 1/2) to your individual 401(k) then you cannot defer anything to your new employer's 401(k) plan (due to the IRC Sec. 402(g) limit) for 2008.


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