Solo 401K Funding from an LLC

[np3]

I have have been funding the Solo 401K with my wages as wells as company contributions to max the contributions at 56K ( 19K + 37K). when i established this solo 401k  account i was told this is good for single employee llc with the only exception being that the spouse of the owner also could contribute to the solo 401k. My wife is also beginning to work for the llc and she will get a w2.

My question is does she need to establish her own solo 401k account ? and also do we need to do any additional paper work to state that she the spouse of the owner. 

Currently i am sole owner of the llc . Do i need to add her as a co-owner to be able to take advantage of the solo 401k.

[dmertz]

A separate account for your wife under your existing one-participant 401(k) plan (a misnomer since it allows both you and your spouse to participate) is required.  Your wife does not have to be an owner of the company to participate in the 401(k) but she must meet the eligibility requirements that you established in the plan agreement.  As an employee and not an owner, the amount available for her to electively contribute to the 401(k) will be determined by her available compensation from her pay (after deducting income taxes and FICA taxes), subject to the individual elective contribution limit for the year.  Presumably the employer contribution is simply a profit-sharing contribution rather than a matching contribution, so the amount of the employer contribution will also be subject to the same base employer contribution percentage (up to 25%) as is used to compute the employer contribution for yourself.

https://www.irs.gov/retirement-plans/one-participant-401k-plans

https://www.irs.gov/pub/irs-pdf/p560.pdf