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My wife is sole proprieter. She obtained an EIN and is recieving

My wife is sole proprieter...
My wife is sole proprieter. She obtained an EIN and is recieving 1099 income. She opened a solo 401k. I would like to rollover money from an old employer and an IRA to my wifes solo 401k. Is this allowed.
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Answered in 14 minutes by:
12/1/2012
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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Thanks for asking your question! I'm sorry to hear about your tax issue and I'm going to try my best to help you understand or resolve it.

Thank you for your question, and thank you for coming to JustAnswer.com. It is possible that you can participate in your wife's Solo 401(k) plan, but to do so you must also generate self employment income from this business. That is, you and your wife need to be working together in the business. If you do not generate income from that business, you cannot participate in the plan and therefore cannot roll your other 401(k) funds and your IRA funds into the solo 401K

You can CLICK HERE to read more about this topic. Have a great night, and feel free to follow up if you have further questions.

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Customer reply replied 4 years ago
Can she pay me as a w2 employee to qualify
Thank you for your follow up. Yes, you could participate in the plan if you were a W-2 employee, but you would have to participate via deferrals. Also, the plan would now be subject to discrimination testing, which adds additional costs to the plan. If for some reason you decided you no longer wanted to participate in the plan, and you were still drawing a W-2, then your wife would no longer be able to participate, either (this is only if you are still an "employee" of the company)

You can read more about Solo 401K plans, HERE

** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**



** Please take a moment to rate my response as "Excellent" so that I may be compensated for assisting you today. Please let me know if my assistance was anything less than "OK Service", as I am compensated based on whether or not I have assisted you with your issue. If you need further clarifications, PLEASE WAIT TO RATE MY ANSWER UNTIL AFTER RECEIVING FOLLOW UP FROM ME. If I receive anything less than OK Service, I do not get paid. Thank you for your kind understanding in this matter. If you have difficulties rating, then simply respond stating that you are having difficulties rating and thank me for my excellent, good, or ok service and we can get the rating applied by the site**

Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
Verified
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Megan C
Megan C
Megan C, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 16,581
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Experience: Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

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