What is the best way to open a solo401K account? Any good suggestions on the firm or brokerage that offer solo401K? I'd prefer to manage that myself stead of buying mutual funds.

Zip Code: chuihuaer@yahoo.com

You might as well contact the remaining discount brokerage houses to see what they offer for someone looking to open a Solo 401(k). The ones I'm familiar with are Schwab, E-Trade, and Ameritrade.

Another option are the mutual fund companies. See what Vanguard and Fidelity have to offer.

Don't forget that the Solo 401(k) needs to be established by December 31 if you want to contribute to it for 2005.

And once the account is worth more than $100k, you'll need to file a 5500-EZ each year. Finally, if you ever have staff who work more than 1,000 hours per year, you'll need to offer the 401(k) plan to them as well.

Zip Code: aschwartz@mdtaxes.com

Hi Andrew,

Thanks for your reply.

About my solo401K, I have a consulting income, and in the meantime I’m a co-owner of a C-Corp(no salary has been drawn from the C-corp yet.) I would like to open a solo 401K for my consultant work, not the C-Corp.
Is there a control group issue I should consider? If so what's the best way to get around with it. "

Thanks a lot,
M.

Zip Code: chuihuaer@yahoo.com

My understanding is that if multiple businesses share common ownership, then the benefits offered to the owners and staff need to be consistant across the board. Otherwise, everyone who owns a business with employees would set up a separate entity, be the only employee in that entity, and offer great benefits through that entity.

So if you have employees in your corporation, you probably can't exclude them from any retirement plan that you set up for your Schedule C.

The retirement plan rules are very complicated, as well as very specific, so I recommend that you run this question by the retirement specialist who is helping you set up your Solo 401k.

Zip Code: aschwartz@mdtaxes.com