Anonymous wrote:

For the 401k - get an FEIN from the IRS using your name, have your 1099 show this FEIN instead of your SS. Use the FEIN to open a individual 401k (fidelity has one with no fees, very easy to set up). You can put 17,500 in it, plus up to 20% of your business net profit - so if you made 30k and had no expenses you could put 23,500 in for the year. It would not work for 2013, as I believe the account had to be opened by 12/31.

Good info. I need input from CPA/Tax Attorney.. I have over $300K in 401K assets at 2 different companies. Both are decent performers and easily come very close to market performance. I do a backdoor Roth annually so don't want to roll the 250K into an regular IRA but would like to transfer this money into an Individual 401K so I can have better control on investments and money can grow tax-deferred.

I'm currently unemployed. Can I do this even if I don't have any current income as a self-employed person? If I never find work again, will that cause problems? If I later find a W-2 job can I continue to hold this Individual 401K?

A more basic question.. Is the individual 401K treated like a regular 401K for the purpose of not being counted for the backdoor Roth process?

Thanks!

Anonymous wrote:FYI. Odds are his bookkeeper should be w2 also. She acts at his direction I assume.

OP here - she does bookkeeping for many other small businesses. never comes to the office, works remotely. we send her receipts etc. So I do think she fits the definition of true 1099.

As an update, I spoke with my boss. we are changing my status from 1099 to W2. he was fine with it.

FYI. Odds are his bookkeeper should be w2 also. She acts at his direction I assume.

find another job before you file your taxes, then file an ss-8 with your tax return. he will be on the hook for your payroll taxes.

barring that, ask him to convert you to W-2 status. he will say no. then you can decide whether to live with it or report him and have him get rid of you.