Short instructional video explaining who qualifies for a Solo 401(k). The speaker defines self-employment (earned income subject to Social Security/Medicare taxes) and states two primary prerequisites: (1) you must be self-employed (no requirement to form an LLC/S-corp—sole proprietors qualify), and (2) you must have no W-2 employees.
If you are a business owner, you're self employed. And when I say you're self employed, let's define it a little bit further. Let's assume that you're self employed with earned income. Earned income would mean income that you're paying Medicare and Social Security tax on. There's two things that call it prerequisites. The first prerequisite to have a Solo 401k would be you have to be self employed. And it doesn't mean you have to have an LLC or an S corp, or a limited partnership or a corporation. It could just be you doing business as yourself. The second item to think about with the Solo 401K and that you got to be aware of, is that you can't have any employees. You can't have any W2 employees.
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