My business is just starting out and I'm not turning a profit yet and I've got some income ($25k for example) but my deductions are running $35K, so I'm at a net loss of $10K for the year. Can I still make a contribution to a Solo 401K or does the business have to be at a Net Profit to do this? and if so is the outcome, that the net loss would increase as the contribution would reduce the income?
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You cannot contribute to your self-employed retirement if your business is not making a profit.
Per the IRS:
The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both:
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