Getting ready for SEP IRA Contribution; Convert to Solo 401(k); 2 steps or 1??? | Ed Slott and Company, LLC

Getting ready for SEP IRA Contribution; Convert to Solo 401(k); 2 steps or 1???

Hi,

I am making my SEP IRA contribution for 2019 tomorrow.

In addition, I am in the process of converting all of my previous year SEP IRAs to a Solo 401(K) so that I can make back door Roth contributions.

For my 2019 SEP IRA, can I just dump the $$$ directly into the solo 401(K) from my checking account and "call it" my 2019 SEP IRA, or do I literally have to make a 2019 SEP IRA contribution into the SEP IRA account, and then at a later date, migrate that to the solo 401(K)?

Note: I did not open the solo 401(K) until 2020, so I cannot make a solo 401(K) contribution for 2019.

Thank you,

curiousGuy

You must make the 2019 SEP contribution to a SEP IRA, and then do the direct rollover to the solo K. Hopefully, your solo K plan allows acceptance of IRA rollovers. You are correct that you cannot make a 2019 solo K contribution because the plan was not adopted by the end of 2019. 

Thank you!!!

 

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