Complete Guide - Mega Backdoor Roth Solo 401k for Sole Proprietors, 1099 Contractors, LLCs

[@michaelmillstone9889]

Regarding the scenario at 25:00, what is the reason $19,500 was contributed to the Roth Solo 401k? Would it not be simpler to contribute $58,000 (assuming 2021) to the voluntary after tax contributions instead? Is there a requirement to fulfill the $19,500 employee contribution first before the $38,500 contribution to voluntary after tax can be made?

[@mysolo401kfinancial3]

Please see the answer posted in our community site: mysolo401k.net/mycommunity/forums/discussion/qa-do-i-have-to-first-make-roth-contributions-before-after-tax-contributions/

[@mysolo401kfinancial3]

Please join (it’s Free!) mysolo401k.net/mycommunity/wp-login.php

[@mysolo401kfinancial3]

Thank you for the participation in the webinar. Here is the link I mentioned: www.mysolo401k.net/solo-401k/mega-back-door-roth-using-solo-401k-plan/

[@SusanWang126]

Great video! Does the pre-tax contribution (employer) result in deduction from the self-employed income, thus resulting in less that can be contributed in the after-tax bucket?

[@mysolo401kfinancial3]

This confirms that the after tax contribution limit is the lesser of your self employment compensation or the overall limit (eg $57k for 2020) REDUCED by any employee or employer contributions to the Solo 401k.

[@SusanWang126]

@@mysolo401kfinancial3 Got it. I understand that the employee pre tax contribution result in a business deduction? In relation to trying to get as much QBI deduction as possible, would it be better to forego the employer contribution (to keep Income as high as possible) and just contribute everything aside from employer contribution as after tax for the rollover?

[@mysolo401kfinancial3]

While you should discuss with your tax advisor, here is a page that may be helpful to the discussion: www.mysolo401k.net/solo-401k/effect-of-section-199a-of-the-tax-code-and-qbi-on-solo-401k-annual-contributions/

[@KevinGChiu]

Can the Roth and After-Tax accounts be the same account since the after-tax is always converted to Roth?

[@mysolo401kfinancial3]

No Separate accounts are needed