Do Roth Contributions have income limits in a Solo 401(k)? How do they work?

No. Roth contributions do not have any income limits in a Solo 401(k)!

Can a Solo 401(k) do Roth Contributions?

Yes. It can do pretax (traditional) and post-tax (Roth) contributions

So this is exactly like a Roth IRA? I thought I was looking at a Solo 401(k)?

No. The contributions get the same type of tax treatment. It is not a Roth IRA, but allowing you to do both Traditional AND Roth style contributions within a retirement plan.

Are there any Roth income limits?

No, there are no Roth 401(k) income limits. A significant advantage to a Solo 401(k) and 401(k)s that offer Roth contributions.

Where can I contribute these new Roth dollars from?

The contributions must come from your self-employed income.

Is there a limit to Roth Contributions inside the Solo 401(k)?

No, you can make as big of an after-tax contribution as you wish to the Solo 401(k) as long as you stay under the contribution limit. However, keep in mind all matching contributions must be pre-tax.

Where do my contributions go?

To make Roth contributions, you must have trust and then trust your bank account for ONLY Roth contributions. You must not commingle Roth and Traditional dollars.

Functionally, you will open two trusts and two bank accounts connected to those trusts at our partner bank. You must name the accounts appropriately. You will be working with our support team, so please call if you have any questions or concerns.

1. Bank Account (Traditional)
2. Bank Account (Roth)

See our 401(k) Plan