When it comes to contributing money into a Solo 401(k) Roth account, there are some questions that are often asked. One of the most important things to remember is that there are limitations to the amount of contributions that can be made. You may not know this, but traditional retirement accounts like that of Roth IRA and other options, have steady rules that need to be understood before you can deposit funds into them. It’s with that understanding in mind that you should comprehend the simple rules of trying to place money into a Roth 401(k) account.

First and foremost, for those that are wondering when you can contribute to these accounts the answer is, immediately. Once you’ve created the Solo 401(k) account and understand the parameters, you can start moving funds into it with a set up account if you’d like. There are several stages of monetary contribution rules that should be followed and understood for the sake of this type of account.

Advantage of Solo 401k Roth over Roth IRA

In regards to the latest year of taxes, you’ll find that for the sake of a Solo 401(k) the contribution of $23,000 dollars on salary deferral end can consist of $17,500 and catch up of $5,500 dollars within the year of 2013 for those that are 50 and older. This is the guideline that is set and followed by those that have this type of account. This differs than that of the IRA option which only allows for $6,500 dollars overall. There is a huge difference in the amount of money put away, which is something that should be noted.

From the year 2012 to the year 2013, there has been a change in the way the numbers work. You’ll find that while the changes are subtle, they are still to be found. There are distribution rules to this that are tax free, but not the contributions themselves which need to be denoted. There are several and various proponents of this, so to fully make sure you’re in compliance with the rules of a 401k Roth account, make sure that you seek professional assistance. This is especially true if you’re self employed and want to receive the same kind of benefits that others are receiving while in the work force. Understanding each component takes a bit of time and effort, but the important concept to understand is that contributions can be made as soon as the initial set up of the account is completed. 

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