Question for those with a solo 401k

[Creflo]

I make employer contributions to my solo401k with my business checking account. I want to make employee contributions (aka salary deferral), and don't know if I should cut the check for this from my personal checking account or my business checking account.

---

Members don't see this ad.

 

[medium rare]

I make employer contributions to my solo401k with my business checking account. I want to make employee contributions (aka salary deferral), and don't know if I should cut the check for this from my personal checking account or my business checking account.

I pay both out of my business checking account. This was my financial advisor’s recommendation. Makes it easier for year end tax accounting as well.

 

[Creflo]

I pay both out of my business checking account. This was my financial advisor’s recommendation. Makes it easier for year end tax accounting as well.

Are you doing roth or traditional when paying out of your business account?

 

[medium rare]

Are you doing roth or traditional when paying out of your business account?

I do a back door Roth.

 

[RangerBob]

My accountant said just make all contributions from the same account. It doesn’t even have to be the business account per him (since I’m a sole proprietor), but that helps with accounting.

I mostly do traditional contributions because it helps me maximize the pass-through deduction, but if I get my taxable income to the limit ($320k?) then I do roth contributions. I usually don’t know about that until after I do my taxes, but apparently you just have to elect (ie, say you will) to make your contributions by the end of the year, not actually make them. So you can do all your taxes and then figure out how much of the remaining total amount you elected to make should be traditional vs roth contributions. So all year I make after-tax contributions and come Jan/Feb/March I make some roth contributions for the prior tax year depending on how my taxes looked. Hope that made sense…

 

[medium rare]

My accountant said just make all contributions from the same account. It doesn’t even have to be the business account per him (since I’m a sole proprietor), but that helps with accounting.

That’s correct. You can you use a personal account as well. Using my business account keeps things cleaner and easier for me when it comes to tax planning.

 

[RangerBob]

That’s correct. You can you use a personal account as well. Using my business account keeps things cleaner and easier for me when it comes to tax planning.

Yes—I should have clarified I my post that for convenience/tracking I also use my business account!