My total contribution this year to my solo 401k is less than either the elective limit (18k) and also less than the profit sharing based limit. Also, even if I decide to contribute more, it may not exhaust the total of my full limits.
Should I first use the elective limit or the profit sharing limit? Is there a benefit to using one classification vs. the other if I am not using the full extent of both contributions? Either is tax implications or paperwork overheads. From what I understand, I can make a single lumpsum contribution. DO I have to do some extra paperwork to show a monthly slaary if using the elective contribution limit? (I do not run a payroll since I just keep the net proceeds from my sole proprietorship as income.
