In 2020, I have worked as both a sole proprietor / individual contractor with no employees and as a W2 part-time employee. I am 41 yrs old (under 50) and will have multiple streams of income in 2020:
- $100K from 1099 contract work as a sole proprietor / individual
contractor (from Jan 1-Apr 31)
- $60K from a W2 as a part-time employee (projected through the entire year from Jan 1-Dec 31)
- $85K in taxable short-term gains from stocks, dividends, and other investment income (projected through the entire year from Jan 1-Dec 31)
Projected Total Income for 2020: $245K from all income streams
I currently have 4 retirement accounts open:
- a Solo (Individual) 401K (new account, balance: $0)
- a Solo (Individual) Roth 401K (new account, balance: $0)
- a Traditional IRA (existing account, balance: $280,000 of which $40,000 is in gains in
2020)
- a Roth IRA (existing account, balance: $118,000 of which $18,000 is in gains in 2020)
I would like to maximize my tax deductions this year and move as much money as possible into both after-tax and tax-deferred accounts.
My question includes:
- Can I contribute up to a max of $57K (employee + employer portion)
to my Solo (Individual) 401K AND a separate amount to my Solo
(Individual) Roth 401K ? Is the max contribution limit of $57k total
across BOTH the solo 401K and solo Roth 401K? Otherwise, what is the
contribution limit on the Roth 401K?
- Can I either:
- (Ideally) Contribute up to a max of $57K (employee + employer
portion) to my Solo (Individual) 401K AND an additional $37,500 to a
Mega Backdoor Roth? Or…
- Contribute up to a max of $57K (employee + employer portion) to my Solo (Individual) 401K AND an additional $6,000 to a "regular" Roth? Or…
- Contribute up to a max of $57K (employee + employer portion) to my Solo (Individual) 401K AND an additional $6,000 to a Traditional IRA?
What can and can’t i do? My goal is to deduct / defer the maximum amount possible.
Note: I tried to do my research before asking this question. Here are some of the links I read:
Thanks for any help with this.