What happens to solo 401k if a business switches from sole proprietorship to s-corp?

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nvkris
Posts: 5
Joined: Mon Apr 17, 2017 7:07 pm

What happens to solo 401k if a business switches from sole proprietorship to s-corp?

Post by nvkris » Mon Apr 17, 2017 7:12 pm

Hi!
I'm planning on starting an individual 401(k) with fidelity (since vanguard doesn't allow IRA roll-in). However, in a few months if my consulting business income increases I might convert my sole proprietorship to an S-Corp. What will happen to my solo-401k then? Do you guys have recommendations?

Thank you so much for your help! This is my first post! :)

Artful Dodger
Posts: 91
Joined: Thu Oct 20, 2016 12:56 pm

Re: What happens to solo 401k if a business switches from sole proprietorship to s-corp?

Post by Artful Dodger » Mon Apr 17, 2017 9:37 pm

You can have a self employed 401k as a sole proprietor or S Corp. I have my plan with Fidelity and started as a sole prop and am now an S Corp. It's been a while so I don't remember all the details, and I think it coincided with some revisions to the 401k options available, but I believe they amended my plan document to the new business name, and rolled the assets into the new plan. I would give Fidelity a call and see what they say, but definitely doable.

harvestbook
Posts: 266
Joined: Sat Mar 18, 2017 7:12 pm

Re: What happens to solo 401k if a business switches from sole proprietorship to s-corp?

Post by harvestbook » Tue Apr 18, 2017 9:48 am

If you think you might change in a few months, I'd simply wait for the dust to settle. You should still be able to max out your 401(k) contributions this year and up to next year's tax date. If it looks like you won't be changing as fast as you'd like, then move forward. Just make sure you get it established this calendar year.
I'm not smart enough to know, and I can't afford to guess.

nvkris
Posts: 5
Joined: Mon Apr 17, 2017 7:07 pm

Re: What happens to solo 401k if a business switches from sole proprietorship to s-corp?

Post by nvkris » Thu Apr 20, 2017 4:52 pm

Thanks guys. Decided to set it up as sole prop for now.

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