Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

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Topic Author
keyfort
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Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by keyfort » Fri May 24, 2019 1:05 pm

I thought I'd start a new thread for this (a topic which came up in another thread) - hopefully it'll be useful to others too.

So if you have a solo 401k and run your own small business (just you and at most your spouse) - with the new deduction from tax for QBI, how do we determine if it's best to make traditional or Roth contributions to the solo 401k? (just a note that apparently the QBI deduction gets phased out from $315,000/yr of income through to $415,000/yr where it goes to zero (AFAIK)).

Maybe I can start with an example:

Let's say you have $300,000 income and get the QBI deduction. Is Roth a better idea than traditional? I know it depends also on retirement factors, but let's assume retirement income will be $100,000 instead of $300,000 for simplicity...

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FiveK
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by FiveK » Sat May 25, 2019 1:19 pm

keyfort wrote:
Fri May 24, 2019 1:05 pm
I thought I'd start a new thread for this (a topic which came up in another thread) - hopefully it'll be useful to others too.

So if you have a solo 401k and run your own small business (just you and at most your spouse) - with the new deduction from tax for QBI, how do we determine if it's best to make traditional or Roth contributions to the solo 401k? (just a note that apparently the QBI deduction gets phased out from $315,000/yr of income through to $415,000/yr where it goes to zero (AFAIK)).

Maybe I can start with an example:

Let's say you have $300,000 income and get the QBI deduction. Is Roth a better idea than traditional? I know it depends also on retirement factors, but let's assume retirement income will be $100,000 instead of $300,000 for simplicity...
Your marginal rate on solo 401k deductions will be 80% * 24% = 19.2%.

At $100K income, the marginal rate on more traditional withdrawals is 12%, so traditional contributions would be better. But at $103,350 income, the marginal rate on more traditional withdrawals is 22%, so Roth contributions now would be better.

Topic Author
keyfort
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by keyfort » Sat May 25, 2019 2:14 pm

FiveK wrote:
Sat May 25, 2019 1:19 pm
keyfort wrote:
Fri May 24, 2019 1:05 pm
I thought I'd start a new thread for this (a topic which came up in another thread) - hopefully it'll be useful to others too.

So if you have a solo 401k and run your own small business (just you and at most your spouse) - with the new deduction from tax for QBI, how do we determine if it's best to make traditional or Roth contributions to the solo 401k? (just a note that apparently the QBI deduction gets phased out from $315,000/yr of income through to $415,000/yr where it goes to zero (AFAIK)).

Maybe I can start with an example:

Let's say you have $300,000 income and get the QBI deduction. Is Roth a better idea than traditional? I know it depends also on retirement factors, but let's assume retirement income will be $100,000 instead of $300,000 for simplicity...
Your marginal rate on solo 401k deductions will be 80% * 24% = 19.2%.

At $100K income, the marginal rate on more traditional withdrawals is 12%, so traditional contributions would be better. But at $103,350 income, the marginal rate on more traditional withdrawals is 22%, so Roth contributions now would be better.
Thank you. I forgot to say that there's state tax marginal rate of 9.3%. Solo 401k contributions are deductible for state tax too, is that right?

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FiveK
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by FiveK » Sat May 25, 2019 3:08 pm

keyfort wrote:
Sat May 25, 2019 2:14 pm
Thank you. I forgot to say that there's state tax marginal rate of 9.3%. Solo 401k contributions are deductible for state tax too, is that right?
Yes for California.

Topic Author
keyfort
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by keyfort » Sat May 25, 2019 6:15 pm

FiveK wrote:
Sat May 25, 2019 3:08 pm
keyfort wrote:
Sat May 25, 2019 2:14 pm
Thank you. I forgot to say that there's state tax marginal rate of 9.3%. Solo 401k contributions are deductible for state tax too, is that right?
Yes for California.
Ah ok thank you. You wrote earlier that deductions are 80% x 24%. Is that because only 80% of a solo 401k contribution is deductible? Whether it's on the employee or employer side? So it's not actually a full deduction?

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FiveK
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by FiveK » Sat May 25, 2019 6:20 pm

keyfort wrote:
Sat May 25, 2019 6:15 pm
FiveK wrote:
Sat May 25, 2019 3:08 pm
keyfort wrote:
Sat May 25, 2019 2:14 pm
Thank you. I forgot to say that there's state tax marginal rate of 9.3%. Solo 401k contributions are deductible for state tax too, is that right?
Yes for California.
Ah ok thank you. You wrote earlier that deductions are 80% x 24%. Is that because only 80% of a solo 401k contribution is deductible? Whether it's on the employee or employer side? So it's not actually a full deduction?
It's 100% deductible, but your QBI deduction will decrease by 20% of your 401k contribution, making your marginal tax saving (1 - 20%) = 80% of the nominal marginal rate for your situation.

That's why the QBI deduction will increase the likelihood that Roth is favorable, but you still have to compare the current and expected future marginal rates to decide.

misterno
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by misterno » Sat May 25, 2019 6:24 pm

FiveK wrote:
Sat May 25, 2019 6:20 pm
keyfort wrote:
Sat May 25, 2019 6:15 pm
FiveK wrote:
Sat May 25, 2019 3:08 pm
keyfort wrote:
Sat May 25, 2019 2:14 pm
Thank you. I forgot to say that there's state tax marginal rate of 9.3%. Solo 401k contributions are deductible for state tax too, is that right?
Yes for California.
Ah ok thank you. You wrote earlier that deductions are 80% x 24%. Is that because only 80% of a solo 401k contribution is deductible? Whether it's on the employee or employer side? So it's not actually a full deduction?
It's 100% deductible, but your QBI deduction will decrease by 20% of your 401k contribution, making your marginal tax saving (1 - 20%) = 80% of the nominal marginal rate for your situation.

That's why the QBI deduction will increase the likelihood that Roth is favorable, but you still have to compare the current and expected future marginal rates to decide.
Maybe i am missing something but if i am a small business owner i can invest thru solo401k as tax deductible where there is no income phase out. So why bother with roth ira in this situation?

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FiveK
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by FiveK » Sat May 25, 2019 6:52 pm

misterno wrote:
Sat May 25, 2019 6:24 pm
Maybe i am missing something but if i am a small business owner i can invest thru solo401k as tax deductible where there is no income phase out. So why bother with roth ira in this situation?
The QBI Deduction-Reduction On Small Business Retirement Plans has more details.

Perhaps the OP was asking about traditional vs. Roth for the 401k option, and any IRA choice is a separate question.

fyre4ce
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by fyre4ce » Sat May 25, 2019 6:54 pm

Are you incorporated or sole proprietor?

The contribution limits for a Solo 401k and an IRA are completely independent.

misterno
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by misterno » Sat May 25, 2019 8:45 pm

fyre4ce wrote:
Sat May 25, 2019 6:54 pm
Are you incorporated or sole proprietor?

The contribution limits for a Solo 401k and an IRA are completely independent.
I am sole prop

lkar
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by lkar » Sat May 25, 2019 11:04 pm

Start by looking at it from the federal side. If you are entitled to take a 199A deduction and your taxable income is below the phase out such that you can take the deduction, then the easiest way to think about it is that your pre-tax contibutions to your 401k are essentially being taxed twice. First, you are paying tax now at a rate of 20 percent of your applicable tax rate on your contributions and then you will pay tax on 100 percent of your contibutions when you withdraw them in retirement.

The 20 percent now is the part that trips people up. But, basically, it works like this -- say that you are married filing jointly and your taxable income before taking the QBI deduction is $250,000 and you contributed $10,000 pre-tax to your 401k. Your QBI deduction is 20 percent of $250,000, or $50,000. You pay taxes on that $10,000 when you withdraw it.

If, instead, you had contributed that $10,000 to a Roth, your taxable income would be $260,000 and now your QBI deduction is $52,000. By taking on an additional $10,000 in income in the form of giving up your pre-tax 401k deduction, you have increased your QBI deduction by $2,000. Effectively, you pay tax today on $8,000 but you get to withdraw $10,000 in retirement tax free. The privilege of postponing tax on $10,000 by contributing to traditional 401k is costing you an extra $2,000 deduction that you could take today.

Is it worth it? It depends on what you think your retirement tax rates are likely to be when the time comes to start paying that tax. Maybe paying a 20 percent tax premium doesn't seem worth it to you if you think your rate is going to be substantially lower.

Then, factor in state taxes. The first question is whether your state's taxable income is calculated using the pre-199A deduction amount or the post-199A deduction amount. This all depends on what the baseline is for state taxes. Since the QBID is a below the line deduction, that means if your state uses federal AGI as the starting point for taxes you're not going to get any break on state taxes by increasing your 199A deduction. I'm not sure what the rule is in California. Assuming it uses federal AGI (most states do) then you're going to get hit with 9.3 percent tax on that extra $10,000 in income, I believe. (I'm not a tax professional and this is not tax advice.)

If you're going to be paying CA taxes in retirement, it still might be worth it to contribute to Roth to increase the federal deduction now. But, for example, if you thought there was a chance that in retirement you would move to a lower taxed state, then you probably would want to keep your retirement contributions pre-tax.

Tl;DR -- Contributing to Roth instead of regular 401k will increase your taxable income now but part of that income might be offset with a higher 199A deduction. Whether it makes sense to do depends on comparison of your state and federal tax rate now versus your anticipate state and federal tax rate when you withdraw the money.

Topic Author
keyfort
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by keyfort » Sun May 26, 2019 2:08 am

FiveK wrote:
Sat May 25, 2019 6:20 pm

It's 100% deductible, but your QBI deduction will decrease by 20% of your 401k contribution, making your marginal tax saving (1 - 20%) = 80% of the nominal marginal rate for your situation.

That's why the QBI deduction will increase the likelihood that Roth is favorable, but you still have to compare the current and expected future marginal rates to decide.
Thank you, that makes complete sense now. Wow, Roth it may be then.

As far as I understand, only the employee side ($19,000) can be placed into the Roth solo 401k? Is that right? The remaining amount to make up the total of $56,000 would have to be placed into a traditional solo 401k?

Topic Author
keyfort
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by keyfort » Sun May 26, 2019 2:12 am

lkar wrote:
Sat May 25, 2019 11:04 pm
...

Tl;DR -- Contributing to Roth instead of regular 401k will increase your taxable income now but part of that income might be offset with a higher 199A deduction. Whether it makes sense to do depends on comparison of your state and federal tax rate now versus your anticipate state and federal tax rate when you withdraw the money.
Thank you - incredibly detailed and helpful and I see the complications as well as uncertainties in this.

We do plan to retire to a 0% state tax state so perhaps our retirement tax rate will be lower, but income is unpredictable.

Considering how complicated it is, I'm wondering if maybe the best thing is to do both: some Roth solo 401k contributions as well as some traditional. As with above, do you know if only the employee side ($19,000) can be placed into the Roth solo 401k? And the remaining amount that would make up the total of $56,000 has to be placed into a traditional solo 401k?

lkar
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by lkar » Sun May 26, 2019 9:51 am

keyfort wrote:
Sun May 26, 2019 2:08 am
FiveK wrote:
Sat May 25, 2019 6:20 pm

It's 100% deductible, but your QBI deduction will decrease by 20% of your 401k contribution, making your marginal tax saving (1 - 20%) = 80% of the nominal marginal rate for your situation.

That's why the QBI deduction will increase the likelihood that Roth is favorable, but you still have to compare the current and expected future marginal rates to decide.
Thank you, that makes complete sense now. Wow, Roth it may be then.

As far as I understand, only the employee side ($19,000) can be placed into the Roth solo 401k? Is that right? The remaining amount to make up the total of $56,000 would have to be placed into a traditional solo 401k?
As I learned on this very board, in an employer sponsored plan only the employee deferrals and not any employer matches can be Roth.

However, employees can make after tax contributions to some 401k plans and these after tax contributions can be converted to Roth — the so-called mega backdoor Roth. Here, you are subject to the overall limit of $56,000 or $62,000.

The catch is that you need to find a company that allows you to set up a solo 401k that allows for after tax contributions and Roth conversions (which are confusingly called in plan “rollovers” in solo 401k speak).

misterno
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by misterno » Sun May 26, 2019 10:37 am

Sorry to repeat my question;

Maybe i am missing something but if i am a small business owner i can invest thru solo401k as tax deductible where there is no income phase out. So why bother with roth ira in this situation?

lkar
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by lkar » Sun May 26, 2019 12:12 pm

misterno wrote:
Sun May 26, 2019 10:37 am
Sorry to repeat my question;

Maybe i am missing something but if i am a small business owner i can invest thru solo401k as tax deductible where there is no income phase out. So why bother with roth ira in this situation?
So that you don’t have to pay taxes when you withdraw the money. Same reason anyone contributes to Roth instead of traditional.

The issue being discussed here is whether 199A makes this more attractive at the moment for certain taxpayers.

misterno
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by misterno » Sun May 26, 2019 1:26 pm

lkar wrote:
Sun May 26, 2019 12:12 pm
misterno wrote:
Sun May 26, 2019 10:37 am
Sorry to repeat my question;

Maybe i am missing something but if i am a small business owner i can invest thru solo401k as tax deductible where there is no income phase out. So why bother with roth ira in this situation?
So that you don’t have to pay taxes when you withdraw the money. Same reason anyone contributes to Roth instead of traditional.

The issue being discussed here is whether 199A makes this more attractive at the moment for certain taxpayers.
I apologize for not being clear

What i meant to ask was; by sticking with tax deferred or not deferred solo401k one does not have to bother with high income phase out. By utilizing solo401k a high income person can deduct it from taxes up to 56k.

So i am not understanding why anyone bothering with Roth IRA in the first place? Because roth ira has income phase out as well but solo401k does not

lkar
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by lkar » Sun May 26, 2019 1:58 pm

misterno wrote:
Sun May 26, 2019 1:26 pm
lkar wrote:
Sun May 26, 2019 12:12 pm
misterno wrote:
Sun May 26, 2019 10:37 am
Sorry to repeat my question;

Maybe i am missing something but if i am a small business owner i can invest thru solo401k as tax deductible where there is no income phase out. So why bother with roth ira in this situation?
So that you don’t have to pay taxes when you withdraw the money. Same reason anyone contributes to Roth instead of traditional.

The issue being discussed here is whether 199A makes this more attractive at the moment for certain taxpayers.
I apologize for not being clear

What i meant to ask was; by sticking with tax deferred or not deferred solo401k one does not have to bother with high income phase out. By utilizing solo401k a high income person can deduct it from taxes up to 56k.

So i am not understanding why anyone bothering with Roth IRA in the first place? Because roth ira has income phase out as well but solo401k does not
I think it’s likely that I’m the one not understanding.

If you have a Solo 401k that allows for Roth you can make contributions up to the 56k or 62k limit and you can make them as Roth or not Roth as you see fit for the first 18/24k. There is no reason to also have a Roth IRA other than to also do yearly 6k or 7k backdoor Roth conversions from your after tax traditional IRA.

Topic Author
keyfort
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by keyfort » Sun May 26, 2019 2:47 pm

lkar wrote:
Sun May 26, 2019 9:51 am
keyfort wrote:
Sun May 26, 2019 2:08 am
FiveK wrote:
Sat May 25, 2019 6:20 pm

It's 100% deductible, but your QBI deduction will decrease by 20% of your 401k contribution, making your marginal tax saving (1 - 20%) = 80% of the nominal marginal rate for your situation.

That's why the QBI deduction will increase the likelihood that Roth is favorable, but you still have to compare the current and expected future marginal rates to decide.
Thank you, that makes complete sense now. Wow, Roth it may be then.

As far as I understand, only the employee side ($19,000) can be placed into the Roth solo 401k? Is that right? The remaining amount to make up the total of $56,000 would have to be placed into a traditional solo 401k?
As I learned on this very board, in an employer sponsored plan only the employee deferrals and not any employer matches can be Roth.

However, employees can make after tax contributions to some 401k plans and these after tax contributions can be converted to Roth — the so-called mega backdoor Roth. Here, you are subject to the overall limit of $56,000 or $62,000.

The catch is that you need to find a company that allows you to set up a solo 401k that allows for after tax contributions and Roth conversions (which are confusingly called in plan “rollovers” in solo 401k speak).
Ok, that makes sense too. Thank you for such detailed explanations - really, it has moved my understanding along very quickly.

The 2019 limit for elective deferrals is $19,000 from what I've read, so assuming a high enough income I guess I could do:

$19,000 into Roth solo 401k
$37,000 into traditional solo 401k
Making $56,000 in total

I'll check with my CPA but does this look right?

fyre4ce
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by fyre4ce » Sun May 26, 2019 3:15 pm

keyfort wrote:
Sun May 26, 2019 2:47 pm

Ok, that makes sense too. Thank you for such detailed explanations - really, it has moved my understanding along very quickly.

The 2019 limit for elective deferrals is $19,000 from what I've read, so assuming a high enough income I guess I could do:

$19,000 into Roth solo 401k
$37,000 into traditional solo 401k
Making $56,000 in total

I'll check with my CPA but does this look right?
Yes, this look right. A few things to add:

You have to make sure you have enough business income to hit these limits. Without running the numbers I think you need to earn at least roughly $200,000 net profit from the business to contribute the maximum $56,000 to a Solo 401k

If you really want to make Roth contributions, you may be able to immediately do a Roth conversion with the employer pre-tax contribution. Of course, this will count as taxable income.

IRA limits are completely independent of the 401k limit. You could do a $6k backdoor Roth IRA contribution in addition to the Solo 401k contributions you mentioned, and also a spousal IRA contribution if you're married.

lkar
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Joined: Sat May 04, 2019 4:02 pm

Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by lkar » Sun May 26, 2019 4:05 pm

keyfort wrote:
Sun May 26, 2019 2:47 pm
lkar wrote:
Sun May 26, 2019 9:51 am
keyfort wrote:
Sun May 26, 2019 2:08 am
FiveK wrote:
Sat May 25, 2019 6:20 pm

It's 100% deductible, but your QBI deduction will decrease by 20% of your 401k contribution, making your marginal tax saving (1 - 20%) = 80% of the nominal marginal rate for your situation.

That's why the QBI deduction will increase the likelihood that Roth is favorable, but you still have to compare the current and expected future marginal rates to decide.
Thank you, that makes complete sense now. Wow, Roth it may be then.

As far as I understand, only the employee side ($19,000) can be placed into the Roth solo 401k? Is that right? The remaining amount to make up the total of $56,000 would have to be placed into a traditional solo 401k?
As I learned on this very board, in an employer sponsored plan only the employee deferrals and not any employer matches can be Roth.

However, employees can make after tax contributions to some 401k plans and these after tax contributions can be converted to Roth — the so-called mega backdoor Roth. Here, you are subject to the overall limit of $56,000 or $62,000.

The catch is that you need to find a company that allows you to set up a solo 401k that allows for after tax contributions and Roth conversions (which are confusingly called in plan “rollovers” in solo 401k speak).
Ok, that makes sense too. Thank you for such detailed explanations - really, it has moved my understanding along very quickly.

The 2019 limit for elective deferrals is $19,000 from what I've read, so assuming a high enough income I guess I could do:

$19,000 into Roth solo 401k
$37,000 into traditional solo 401k
Making $56,000 in total

I'll check with my CPA but does this look right?
This is what I do, except I am over 50 so get an extra $6k in catch up employee deferrals.

I am in a partnership so it’s a workplace 401k not a solo 401k, but it’s the same principle. I decided this year to start adding in some Roth contributions, so my employee deferrals are Roth and then my contributions designated as employer and match contributions are traditional pretax. So I will take on an additional $25,000 in income this year by not being able to deduct the employee deferrals but I will increase my 199A deduction by $5,000. The upshot is that at the 24 percent bracket, the 199A deduction is allowing me to make $25,000 in Roth contributions at 19.4 percent.

I’m gambling that my retirement tax rate will be close to 19.4 percent or higher. But the way I figure it, diversity between taxable and post-tax assets in retirement has some value too and allows some level of flexibility.

Luckywon
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by Luckywon » Sun May 26, 2019 6:29 pm

fyre4ce wrote:
Sun May 26, 2019 3:15 pm
keyfort wrote:
Sun May 26, 2019 2:47 pm

Ok, that makes sense too. Thank you for such detailed explanations - really, it has moved my understanding along very quickly.

The 2019 limit for elective deferrals is $19,000 from what I've read, so assuming a high enough income I guess I could do:

$19,000 into Roth solo 401k
$37,000 into traditional solo 401k
Making $56,000 in total

I'll check with my CPA but does this look right?
Yes, this look right. A few things to add:

You have to make sure you have enough business income to hit these limits. Without running the numbers I think you need to earn at least roughly $200,000 net profit from the business to contribute the maximum $56,000 to a Solo 401k
For those who do not have enough business net business income to make the full $37,000 employer profit sharing contribution, an after tax contribution can be made, in addition to the pre tax employee deferral and employer profit sharing contributions, up to the full $56,000 total limit (provided your 401k allows these and your pre-tax earnings are at least $56,000). If your plan allows IRR's, I would think this would be a no-brainer as money in a Roth account would seem to be preferable than money in a regular non tax advantaged account.

fyre4ce
Posts: 261
Joined: Sun Aug 06, 2017 11:29 am

Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by fyre4ce » Tue May 28, 2019 1:02 pm

Luckywon wrote:
Sun May 26, 2019 6:29 pm
fyre4ce wrote:
Sun May 26, 2019 3:15 pm
keyfort wrote:
Sun May 26, 2019 2:47 pm

Ok, that makes sense too. Thank you for such detailed explanations - really, it has moved my understanding along very quickly.

The 2019 limit for elective deferrals is $19,000 from what I've read, so assuming a high enough income I guess I could do:

$19,000 into Roth solo 401k
$37,000 into traditional solo 401k
Making $56,000 in total

I'll check with my CPA but does this look right?
Yes, this look right. A few things to add:

You have to make sure you have enough business income to hit these limits. Without running the numbers I think you need to earn at least roughly $200,000 net profit from the business to contribute the maximum $56,000 to a Solo 401k
For those who do not have enough business net business income to make the full $37,000 employer profit sharing contribution, an after tax contribution can be made, in addition to the pre tax employee deferral and employer profit sharing contributions, up to the full $56,000 total limit (provided your 401k allows these and your pre-tax earnings are at least $56,000). If your plan allows IRR's, I would think this would be a no-brainer as money in a Roth account would seem to be preferable than money in a regular non tax advantaged account.
This is only true if the plan allows it, and the only Solo 401k I'm aware of that does this is MySolo401k. My wife has an Etrade Solo 401k and they do not currently allow after-tax contributions. We did send them a request a couple weeks ago to see if this feature can be added; nothing so far. If Etrade gives us a way to add, I will definitely post here and maybe they'll get new clients.

Luckywon
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Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by Luckywon » Thu May 30, 2019 10:14 am

fyre4ce wrote:
Tue May 28, 2019 1:02 pm
This is only true if the plan allows it, and the only Solo 401k I'm aware of that does this is MySolo401k. My wife has an Etrade Solo 401k and they do not currently allow after-tax contributions. We did send them a request a couple weeks ago to see if this feature can be added; nothing so far. If Etrade gives us a way to add, I will definitely post here and maybe they'll get new clients.
I will also send them a request. Was there a specific person/department you sent the request to? Perhaps it will be more effective if I sent my request there as well.

fyre4ce
Posts: 261
Joined: Sun Aug 06, 2017 11:29 am

Re: Calculating Traditional vs Roth Solo 401k Contributions With QBI Deduction

Post by fyre4ce » Thu May 30, 2019 11:56 am

Luckywon wrote:
Thu May 30, 2019 10:14 am
fyre4ce wrote:
Tue May 28, 2019 1:02 pm
This is only true if the plan allows it, and the only Solo 401k I'm aware of that does this is MySolo401k. My wife has an Etrade Solo 401k and they do not currently allow after-tax contributions. We did send them a request a couple weeks ago to see if this feature can be added; nothing so far. If Etrade gives us a way to add, I will definitely post here and maybe they'll get new clients.
I will also send them a request. Was there a specific person/department you sent the request to? Perhaps it will be more effective if I sent my request there as well.
No - they have an online submission form through their website. It lets you choose the topic, and I think we chose something like "Account Setup." I'm starting to think the message might not have sent properly in the first place, because it's been a couple weeks at least. I'll try resending it.

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