Q.What is a Solo 401(k)?
The Solo 401K (also known as the individual 401(k) and Self-Employed 401(k)) is a retirement savings plan for the self-employed individual, corporation, limited liability company, and partnership (husband and wife), with no full time W-2 employees other than the owner and his or her spouse and children.
A.Just a test
The administrator of the Solo 401(k) Plan is the business owner, his or her spouse or a partner.
In 2008, the maximum contribution to a Sole 401(k) is $46,000 ($51,000 if age 50+). With the Solo 401(k), the owner-employee can tax defer up to $15,500 a year as employee contribution and the business can deduct up to 25% of your compensation (net income) up to 46,000 per year ($51,000 if age 50+) as an employer contribution.
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