# Contributing to multiple 401K's



## UberLAguy (Aug 2, 2015)

Hard to believe but you can contribute a total of $110K in two 401K account
Can some enlighten me ?

Can you give an example ?

https://www.mysolo401k.net/multiple-retirement-plan-solo-401k-contribution-rules/


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## UberTaxPro (Oct 3, 2014)

UberLAguy said:


> Hard to believe but you can contribute a total of $110K in two 401K account
> Can some enlighten me ?
> 
> Can you give an example ?
> ...


Not 2 401k accounts. The article is talking about one 401k and a profit sharing plan. Profit sharing plans don't count towards the "maximum allocation" (the max you can contribute to all your retirement plans)


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## UberLAguy (Aug 2, 2015)

UberTaxPro said:


> Not 2 401k accounts. The article is talking about one 401k and a profit sharing plan. Profit sharing plans don't count towards the "maximum allocation" (the max you can contribute to all your retirement plans)


I wish you could explain all this in layman's terms. Still do not understand a lot of this.


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## mbd (Aug 27, 2018)

Don't worry about 401k, you are driving U/l...


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## UberLAguy (Aug 2, 2015)

I do. I plan to bring in 5K a month and put everything in 401K. With a rental car, so no miles deduction allowed


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## UberNorthDfw (Nov 22, 2014)

401K plans are for employees- as an Uber Lyft drivers we are not employees- you need to look into IRA or self-employed IRA


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## FLKeys (Dec 27, 2018)

UberNorthDfw said:


> 401K plans are for employees- as an Uber Lyft drivers we are not employees- you need to look into IRA or self-employed IRA


There are also 401(k)'s for self employed people, they go by several names including Solo 401(k). If you make a taxable profit a Solo 401(k) is the best option to shield 100% of you taxable income up to $56,000 and another $6,000 if over age 50.

I'm in the process of setting mine up with Vandguard. I selected Vandguard for a few reasons, one being they have a complete self starter kit for free, they have the lowest fees that I could find, and they have the type of fund I want to invest in. I have my Roth IRA with Vandguard as well and I am happy with the performance I have been getting.

I use another website called mysolo401k to answer any questions I have for setting it up since the Vandguard kit is just a simple self starter kit with basic instructions.

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


UberLAguy said:


> I wish you could explain all this in layman's terms. Still do not understand a lot of this.


I think as an individual you are limited to how much you can put into multiple 401(k)'s maybe $19,000 if I remember correctly. However if you have a W-2 job with a 401(k) the employer can put money (profit sharing) into the 401(k) up to $56,000 or what ever the limit is and you can still put up to $56,000 in the Solo 401(k) if you meet the requirements to do so.

*Contributions to a Solo 401(k) consist of two types
Type 1*
Elective Deferral (401k) also known as Employee Contributions. The maximum elective deferral is $18,500 in 2018, or $24,500 if age 50 or older. For 2019, the elective deferral increased from $18,500 to $19,000, or $25,000 if age 50 or older.

*Type 2*
Profit sharing also known as Employer Contribution. This amount cannot exceed $55,000 for 2018. For 2019, this amount cannot exceed $56,000.

If your business type is a *Corporation*, the maximum profit sharing contribution is 25% of gross income and still subject to the above profit sharing amounts.

If your business type is a *Sole Proprietor/Partnership*, the maximum profit sharing contribution is 20% of net income and still subject to the above profit sharing amounts.

**IMPORTANT*
If you decide to take the full $18,500 for the elective deferral (Type 1), you are limited to making $36,500 in profit-sharing contributions (Type 2) so that your contributions do not exceed $55,000 *for 2018*.

*For 2019*, If you decide to take the full $19,000 for the elective deferral (Type 1), you are limited to making $37,000 in profit-sharing contributions (Type 2) so that your contributions do not exceed $56,000.


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