Solo 401K and IRA
Husband age 68 in 2015 (73 in 2020) Wife age 62 in 2015 (age 67 in 2020). H created a solo 401k in 2015 and reported in
Schedule C profit before his 401k contribution of $ 10,000 each in years 2015 to 2017. The $ 10,000 profit in those years were reduced each year by a $9,000 contribution to his solo 401k. He also made a matching contribution each year on his behalf.
In 2018 and 2019 the business lost $8,000 each year. In 2020 he expects a loss of $12,000
1. Could his business been able to make a 401k contribution in years 2018 and 2019 even though Schedule C showed a loss of $8,000 each year.
2. Can he pay his wife a salary of approx $ 4,000 in 2019. She does phone calls writes checks, makes deposits, reconciles the bank, sets appointments .
3. Therefore can wife set up a Roth IRA in 2019 and she can contribute $ 4,000 for herself?
4. Can he contribute to his Roth IRA in 2019 $ 4,000 also because his wife had $4,000 in W2 wages
Permalink Submitted by spiritrider on Thu, 2020-01-30 04:34
A little constructive criticism and a suggestion. It is pretty clear from your post that a professional should have been involved from the very beginning. If you made excess employer 401k contributions, I do not believe that you should attempt a DIY solution. You need to contact a professional immediately.
Permalink Submitted by ocaenl1-aol.com on Thu, 2020-01-30 14:29
Comment was about my good friend and long time neighbor. Did not see his tax return but he indicated therewere other forms, he thinks related to this situation filed. I will tell him and suggest he sees a professional like you said. Maybe his return was done correctly, he just did not give me enough details.