I have the following questions for contributions to my solo 401k plan.

Assuming a net YTD of $75,000

QUESTION 1: My self-employed business entity type is a sole proprietorship. Am I correct that because I am 52, I can make a deferral of $17,500+5500?

ANSWER:  Correct that based on net self-employment income of $75,000 for tax year 2013, you will be able to maximize the solo 401k, 2013 annual contribution. Therefore, you will be able to make an employee elective deferral of $17,500 plus a catch-up contribution amount of $5,500 because you are aged 52, resulting in $23,000 of employee contributions.  Please click on solo 401k contribution calculator to run a quick calculation.

QUESTION 2: And the part that varies is the Employer Contribution?

ANSWER: Based on $75,000 of net self-employment income in 2013, the profit sharing (employer) contribution amount will be $13,940.28. See the solo 401k contribution calculator to confirm.

QUESTION 3: How many times can I make a contribution in this year and up to 4/15/2014 or the extension date?

ANSWER: You can make annual solo 401k contributions-- up to maximum limit of $56,500 since you are over age 50--as many times up until you file your tax return, including tax filing extensions.

QUESTION 4:   there a limit on number of contributions pert tax year?

ANSWER:  No the IRS rules do not place a limit on the number of solo 401k contributions, just on the maximum annual solo 401k contribution amount as discussed above.

QUESTION 5: Does the Employer Contribution and deferral have to be separate deposits?

ANSWER: No as long as the employee contributions are not applied as Roth solo 401k contributions. If applied as Roth Solo 401k contributions, the employee contributions would need to be made to the Roth designated bank or brokerage account.

QUESTION 6: Can one be done without the other?

ANSWER: Yes the key is not to exceed the annual solo 401k contribution limits.

QUESTION 7: Can the Employer Contribution be done all at once at the end of the year or up to 4/15/2014 or the extension date?

ANSWER: The contribution can be made anytime during the year up until the tax return due date, including any extensions (IRC Sec. 404(a)(6), to be deductible for a given year.

Thank you,

David in Arizona

QUESTION: What is the longest term I can take a solo 401k loan for my primary residence?  I plan on buying a home to retire in the next 10 years and was hoping to rent it out until that time so I can take advantage of the low interest rates currently offered.  Below says 5 years with the exception of "primary residence" which is what it would be when I retire.  I guess the other part of this question is how long can I wait before this would not be a primary residence?

Thank you,

Richard in Kentucky

ANSWER: Unless you will be using the home from day one as your primary residence, the solo 401k loan payback period will be 5 years. In other words, if your plan is to use the home as a vacation home now or in 10 years instead of your primary residence from day one, you cannot extend the solo 401k loan to the 15 year period. Note that the first item the IRS agent will audit for in the event of an audit is for compliance with the solo 401k participant loan rules.