Contribution Limits
As the employee and the employer, the business owner is permitted to make a combination of contributions, including salary deferral and profits from the business. Also, if the business owner is age 50 or
older, they are able to defer additional salary in the form of a “catch-up” provision.
The contribution limits for 2006 and 2007 are:
|
2006 |
2007 |
Employee |
Annual Contribution |
$15,000 |
$15,500 |
50+ Catch-Up Provision |
$5,000 |
$5,000 |
Employer |
Up to 25% of W-2 Compensation, if incorporated
|
|
Up to 20% of Self Employment Income as Sole Proprietor |
Total Plan Contribution Limits |
Lesser of 100% of compensation or |
$44,000 |
$45,000 |
Business owners should be aware that contribution limits, whether to deferred
a 401(k) or a Roth 401(k), are counted in the aggregate. The limits indicated are for the entire Solo 401(k). Exceeding the allowable limits for each component is not permitted.
 |
> Alternative Investments
> Traditional Investments
> Automated Cash Management Sweep Options
|
