All Forum Posts by: Neil Copeland

Had some time to chat with my CPA, and she stated the primary requirements for self-employment are the active income (as you have all schooled me on), the income taxes paid for the business (which would flow through my LLC to my personal return), and the self-employment tax that would need to be paid. Based on this, I will have further questions about the use of a Solo 401k, but will post them in a different section if appropriate.

Thanks again to you all, and looking forward to getting started.

@Brian Eastman

Sounds like it may be IRA/LLC with checkbook control....great to be here and great advice. Thank again....

@Dmitriy Fomichenko

@Brian Eastman

Thank you both.  And I will let you know what my CPA says.  Is it fair to say that if I had started a solo 401k while in the laundry business that I could have continued to use it even after I sold the laundry?

@Brian Eastman

That is good information. I purposely don't do my own taxes, and i will check with my CPA on this matter. I wonder if I am working too hard to make this solo 401k a reality when the IRA-LLC construct is a rather close second. My limited research seemed to point to the solo 401k being the way to go if you can make it happen.

@Brian Eastman

Thank you for being direct with the answer. So to qualify would my LLC need to be receiving income that I actively participated in? I ask because up until about two years ago I owned a coin laundry (under the same LLC) in which I actively participated in (personally staffed, maintained, cleaned, collected funds, etc.), but did not draw any wages. Would I, personally, have needed to draw some type of wages from the LLC?

A couple of questions that may lead to others, so here goes. I have a single member LLC that owns rental property, and all of the rental income and rental expenses flow through that LLC. At tax time, that profit/loss from the LLC flows through a Schedule C to my personal tax return. I am also a W2 employee. Having changed jobs a few times, I also have a traditional IRA where funds from old 401k's have been rolled. Questions below.

1. Can I open a solo 401k since I have an income producing LLC?
2. If the answer to #1 is yes, can I also roll the IRA funds into the new solo 401k? I understand that any future deposits into the solo 401k must come from the LLC and not from me personally.

Thanks in advance.