Retirement tax questions

She can certainly enroll in the employer 401 (k) and still be eligible for the employee contribution from her self-employment 401 (k) plan. However, the maximum amount that she can contribute on the employee side of the solo 401 (k) plan is reduced by her employee contributions to the employer plan.  To summarize:

(1) For the employee portion of her solo 401 (k) plan, she can contribute up to $18,000 ($24,000 if over 50) minus the amount she is contributing the new employer plan.

(2) The amount she can contribute on the employer side of her solo 401 (k) is unaffected by the new employer plan (other than she is bound by the overall contribution limits of $54,000 in each plan for both employee and employer)

(3) On the solo 401 (k), she can contribute no more than her net profit from self-employment minus the deductible portion of her self-employment tax minus any deductions for self-employed health insurance premiums.


EDITED to reflect comments by dmertz - the retirement plan guru

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