BACKGROUND & QUESTION: The self-employed business I set up the self-directed solo 401k under was a web based marketing company I owned franchise rights to. That company recently went out of business this year. I assume I need to find or create another business to continue with the solo 401k.  What are some of the more popular businesses that you are aware of that I could pursue?  It does not have to make a lot of income and I do not want it to take much time, as I just need it to be legal so I can use my Solo401k properly for self-directed financial investments. Thoughts?

ANSWER:  One can continue with the solo 401k; he or she just won’t be able to make any annual contributions if self-employment income ceases. In short, a solo 401k plan does not have to be closed when self-employment stops. However, if one would like to make ongoing annual contributions, he or she can perform self-employment activity from a wide variety of businesses. For example, one can be a handy man, a baby sitter, a carpenter, an architect, an attorney, a CPA, etc. At the end of the day, one would need to perform services that lead to self-employment income in order to make annual solo 401k contributions.

Additional Information
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Latest IRS Solo 401k News

QUESTION: In what name does the homeowners insurance need to be under? In talking with different insurance companies, they are telling me that they cannot place the insurance under the name of the solo 401k trust. Is there a way around this?

ANSWER: Home owners insurance is always listed in the name of the trustee, which is the solo 401k owner(s). However, the insurance payments must be made using 401k funds because the real property is an asset of the solo 401k.

Thanks again for all of your help!

Regards,

Joe M in Ohio