Mark Kohler explains who can use a Solo 401(k): self-employed people with no employees, or those with only a spouse, children, or partners. The key rule most miss: hiring an employee doesn't disqualify you until they hit their one-year anniversary.
The solo K concept. This was created specifically for people that don't have a lot of employees in a company. So to qualify for this, you must be self employed with no other employees other than you spouse, kids or business partners in the company. But all the 401k rules and matching and employee issues, you don't have to worry about any of that with the solo K. So we want to make sure you qualify for this so you can get this kind of like expedited, more simple 401k that you can put 70 grand a year into.
Here's what's interesting on this point. Maybe you do have an employee right now. You might qualify qualify still because you're disqualified once you have an employee, a full time employee that hits a one year anniversary. So if you hired a full time employee six months ago, okay, great, you can still do a solo 401k this year and then in fact you turn the corner and then when they hit their anniversary date, that's when your solo 401k would have to end.
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