Question about solo 401k

5 Replies

Hi, I am planning to convert a 401k With a company I am no longer employed with to a solo401k. I am self employed (real estate agent) and intend to use the funds to purchase a single family home (or a duplex if it falls in my price range). I'm will need to add about 15-25 thousand dollars to the solo 401k (once I've established it) to be able to make the purchase in the price range I am looking at plus leave some monies in reserve. I understand that the contribution limits are generous.

Here is my question:

1. If I contribute $18,000 to the solo401k for 2015, would I be able to deduct the $18,000 from my gross income on my 2015 tax return? (As would be the case with a regular 401k).

Thanks!

@Fred Lutes

Yes, your employee elective deferrals are tax-deductible with a Solo 401k just like with the regular 401k. 

If your plan allows for post tax contributions into Roth 401k account then of course those contributions are not deductible from your income but the pre-tax contributions are deductible.