Does the IRA Financial Group's Solo 401(k) Plan allow for Roth Contributions?
Yes. IRA Financial Group’s Solo 401(k) Plan allows participants to elect to treat contributions under the plan that would otherwise be elective deferrals as designated Roth contributions. For this purpose, an “elective deferral” is an employer contribution to a 401(k) plan that is excluded from the participant's gross income only because the 401(k) plan is qualified or an employer contribution to a tax sheltered annuity under a salary reduction agreement to the extent excluded from gross income by 403(b) . An elective deferral is instead a designated Roth contribution if the participant “designates” it as not being excludable. A participant's designated Roth contributions for any year may not exceed the maximum amount of elective deferrals that could be excluded from gross income, less the elective deferrals for the year that the employee does not designate as Roth contributions. A participant must include a designated Roth contribution in his or her gross income at the time he or she would have received the amount in cash absent the 401(k) election.
Please contact one of our IRA Experts at 800-472-0646 for more information.