"The Web" is not a recognized expert.

June --

Government Consultant. Indie for 3 years.

What are your thoughts on opening a SEP vs. a solo 401k. Since the SEP is limited by my net income I'd like the increased contribution limit of a solo 401k.

However, my understanding is that a solo 401k requires an indie to incorporate first?

F Rome


I so wish that F Rome and everyone else who says "my understanding is" would give me just a hint of where they get all this misinformation.

When indies send me an email I ask for some information. One of my questions is "Where do you get your tax info?"

Do you know what many of them answer? "The Web."

Well, "the Web" is not a recognized expert. Who on the Web? What on the Web?

I'd rather they tell me they got the info from Aunt Tillie. At least that's a source. A bad source but one you could put your finger on.

Anyway, F Rome has it wrong. You do not have to be a corporation to have a UNI-k, Which also goes by the names: one-person 401-k, a solo-k, an individual -k.

And a UNI-k does allow flexibility and a greater contribution than a SEP. I recommend it over a SEP.

Caveat: You may open a SEP up through tax return filing time in October for the previous year.

A UNI-k must be opened by December 31 of the year for which you will make the contribution. You do have until October of the following year to actually make the contribution.

-- June Walker