Solo 401k

Forum|Forum|1 year ago
February 26, 2025
3 replies
20 views

If a self employed person currently has a sep ira and wants to start a solo 401k, can they switch in the same year?

They have have made 2024 contributions to the sep (actually paid in 2025 for 2024).

ProSeries Professional

This topic has been closed for replies.

Just-Lisa-Now-

Intuit Community Champion

I thought a solo 401k had to be setup before the end of the year? maybe that changed, its been a long day

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

J

jjtrcka221Author

Level 3

This one will be setup within a month. I know they need to close the sep ira also. Don't think they can have both at the same time. I just want to be sure they can make 2025 contributions to the 401k even though the sep was still open for a couple of months during the same year.

Just-Lisa-Now-

Intuit Community Champion

https://carry.com/learn/contribute-to-solo-401k-and-sep-ira#:~:text=If%20your%20SEP%20IRA%20was,plan%20like%20a%20Solo%20401k.

https://www.irafinancialgroup.com/learn-more/solo-401k/solo-401k-and-sep-ira/

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

T

TaxGuyBill

Level 15

They can have both. But the employer contribution limit applies to the combined contributions between the two plans.

One of the Secure Acts allow a 401k to be set up and contributed to by the due date of the employer's return.

qbteachmt

Level 15

There is a First Year Retroactive provision:

SECURE 2.0 legislation added a benefit for sole proprietors establishing a 401(k) plan. Specifically, a new 401(k) plan can be adopted in 2025 and contributions can be counted as 401(k) deferrals for the 2024 year.

Don't yell at us; we're volunteers

Sign up

Login with SSO

Let's get you signed in

Login with SSO