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One-Person 401k plans can be a nice tax shelter
One-Person 401k plans can be a nice tax shelter for proprietors, who as individuals can put in up to $15,500 ($20,500 if age 50 or older). And the firm can pay in up to 20% of net earnings from self-employment. So on $100,000 of net earnings, you can put $35,500 into a solo 401(k) ($40,500 if born before 1959). The comparable Keogh payin would be $20,000. The maximum total payin for 2008 to $46,000 ($51,000 if born before 1959).
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