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Old 05-21-2013, 01:10 PM
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Join Date: Jan 2013
Posts: 4
Individual 401(k)

Hello,

I work as a tutor and am considered an independent contractor (1099-MISC).

I would like to open an individual Roth 401(k) at one of the mutual fund companies. As I understand it, contributions can be made to the plan in both the employee and employer capacities subject to the following limits:

Employee: $17,500 or 100% of compensation
Employer: 25% of earned income

I know that my employee Roth contributions are not deductible (just as Roth IRA contributions would not be deductible). However, are the employer Roth contributions treated as a business expense? That is, could I deduct the employer part of my contributions on Schedule C (even though it's a solo Roth 401k)? And in general, are there any tax differences between making employer vs. employee contributions to an individual Roth 401(k)?

Thank you!



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