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Can I use the same individual 401k to receive contributions of income from (1) unincorporated sole proprietor income and also (2) single-member LLC?

I provide consulting services as an unincorporated sole proprietor.  I have  a longstanding individual 401k for this business endeavor.  The 401k is a prototype "super simplified standardized individual 401k profit sharing plan" with a brokerage.

I have another service business, in a different field, which is organized as a single-member LLC.   There are not retirement plans specifically associated with this business.

Can I contribute income from business

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2 Replies
DavidD66
Expert Alumni

Can I use the same individual 401k to receive contributions of income from (1) unincorporated sole proprietor income and also (2) single-member LLC?

Yes, because you own both businesses, your two business are considered a controlled group  As a controlled group, they are treated as a single employer with regard to retirement plans.  If you are 100% owner of your sole proprietorship and your LLC is a single-member LLC, these must be treated as a single company and your net earnings from self-employment income will be determined by aggregating these two businesses.  

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2020LLC
Returning Member

Can I use the same individual 401k to receive contributions of income from (1) unincorporated sole proprietor income and also (2) single-member LLC?

I formed a new LLC in 2020.  When I lost my job last year I rolled my 401K with my previous employer into a new 401k under the LLC entity.  I contributed $700 from my LLC income into the new 401k on 12/31/2020 in order to max out my contribution for the year.  Where do I enter the $700 on the tax forms?  Also, I paid a set up fee to the broker and  have annual maintenance fees on the new LLC 401k.  Do I enter this on the Schedule C?

 

Also, I had some personal property expenses (desk, computers, furniture, phone, etc.).  I use some 100% of the time and some 50% of the time for business use.  Do I need to fill out 4562 for this type of personal property, or is personal property an exception?

 

Thanks.

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