Thanks for your website. It gives lot of information for starters like me.
I just started working as indie software consultant. I wanted to open a solo 401k also. I read in your blog like if I want to contribute to solo 401k I need EIN number. If I apply for EIN number, I have to use that EIN number for my clients. Is that correct?
and also Do I have to open a business account with that EIN number or my personal account should be fine?
EIN stands for Employer Identification Number. Here's a couple of my posts on EIN-employer identification # (2)
When you establish a 401k and certain other kinds of self-employed pensions you must get an EIN for the pension. That's because the pension is an entity -- something that is separate from you -- and it must have its own identifying number.
For some pension plans, once assets exceed $250,000 a tax return for the pension must be filed. It is Form 5500 or Form 5500-EZ. You, the indie, must then also have your own EIN because it is required on the Form 5500.
Keep in mind this does not mean that you have two EINs. Your pension has an EIN and you have an EIN.
You do not have to open a checking account with your EIN. You may use your personal account as long as you are not operating as an LLC.
I don't know what you mean by "use that EIN number for my clients."