Oppenheimer single k
No matter what the 401(k) plan is called by a plan provider, it must meet the rules of the Internal Revenue Code.
If you hire employees and they meet the plan eligibility requirements, you must include them in the plan and their elective deferrals will be subject to nondiscrimination testing (unless the 401(k) plan is a safe harbor plan or other plan exempt from testing).
For corporations: The profit-sharing contribution allocation cannot exceed 25% of compensation as defined by the plan.
For sole proprietors or partners: The profit-sharing contribution allocation cannot exceed 20% of your company’s net earned income.
A business owner with no common-law employees doesn't need to perform nondiscrimination testing for the plan, since there are no employees who could have received disparate benefits.
The no-testing advantage vanishes if the employer hires employees.
Self-employed individuals and businesses employing only the owner, partners and spouses have several options for tax-advantaged savings: an individual 401(k) plan, a SEP IRA, a SIMPLE IRA or a profit-sharing plan.
Each option has distinct features and amounts that can be contributed to the plan each year.
You must make a special computation to figure the maximum amount of elective deferrals and nonelective contributions you can make for yourself.This is the maximum that can be contributed to the plan for Ben for 2018.A business owner who is also employed by a second company and participating in its 401(k) plan should bear in mind that his limits on elective deferrals are by person, not by plan.The business owner wears two hats in a 401(k) plan: employee and employer.Contributions can be made to the plan in both capacities.