At New Direction Trust Company, Solo 401(k)s are only available to self-employed individuals with no other employees. This allows an account holder to make employee contributions (for a personal tax benefit) and employer contributions (for a business tax benefit) to the same Solo 401(k). In some cases, these contributions will bear the same tax advantages of a Traditional IRA - You defer contributions from your annual income for tax purposes. In other cases, your plan document may allow post-tax Roth contributions (employee contributions only), enabling you to build a tax-free portfolio for the long haul. Your one Solo 401(k) may even permit both types of contribution, again depending on the plan document.
|Tax Year||Annual Limit - Employee + Employer |
(below age 50)
|Catch-Up Contribution |
(age 50 or above)
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