Solo 401K and LLC question

[Anonymous]

How does this work if I have an LLC? I recently started a side gig and set it up as an LLC (pass through, 2 - person, spouse). Had to do LLC because the customer required it. Let's say I get $10K in revenue and distributed to me. Does the LLC have to setup a 401K in my name or do I have to setup an solo 401K in my name and deposit that money into that 401K?

[Anonymous]

Single member llc is a disregarded entity for tax purposes - i.e., it doesn’t exist from IRS’s point of view. You would set up a solo 401k. Try fidelity.

[Anonymous]

You can have an LLC (which is a state registration) and an S-Corporation (which is recognized by IRS for tax purposes). Note, IRS only recognizes solo proprietorships, S-corp, and C-corps. In your case, send in the form to IRS to set up as an S-Corp. Your S-corp would set up the 401k (Fidelity and other financial institutions can help you). You and your spouse can contribute up to the maximum amount allowed from your "salary" and the S-Corp can contribute up to 25% of you and your spouse's salary as a benefit. However, all those employed by the S-Corp must get the same percentage of 401k contributions from the company.

[Anonymous]

A SEP IRA is another option, and easier to set up

[Anonymous]

Anonymous wrote:Single member llc is a disregarded entity for tax purposes - i.e., it doesn’t exist from IRS’s point of view. You would set up a solo 401k. Try fidelity.

+1 it would be in your name if you are a single member LLC. There are online calculators that can estimate your max contributions for the year.

[Anonymous]

+1 on sep Ira. You can do it at fidelity