Harvard Law Attorney George Blower leads an in-depth discussion of the 2022 and 2023 Mega Backdoor Roth Solo 401k Self-Directed Solo 401k Contribution Limits & Types for self-employed businesses taxed as S-corporations, C-corporation, LLCs taxed as S-corporations/C-corporations including Secure Act 2.0 Update!

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The solo 401k plan, commonly referred to as self-directed Solo 41k is the retirement plan of choice for self-employed individuals or owner-only businesses including for the features highlighted below:

-The highest contribution limits for any defined contribution plan including up to $61,000 (or even $66,500 if you are 50 or older) for 2022 (for 2023: $66k or $73.5 if you are 50 or older).

-The ability to make pre-tax, Roth, and even Mega Backdoor Roth contributions.

-401k participant loans of up to $50,000

-Invest with checkbook control in real estate, cryptocurrencies, notes, private placements, and other types of alternative investments.

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For over 10 years, My Solo 401k Financial is the leading self-directed solo 401k provider having helped over 8,000 clients take control over their retirement funds by focusing on superior knowledge, expertise, and customer service with over 100+ 5-star verified customer reviews on the Better Business Bureau (BBB)….(read more)

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The Mega Backdoor Roth Solo 401k has become an increasingly popular option for high-income individuals looking to maximize their retirement savings. With the passage of the Secure Act 2.0 in 2022, the rules surrounding this strategy have been clarified and expanded, making it an even more attractive option for those looking to take advantage of tax-advantaged retirement savings.

Under the Mega Backdoor Roth Solo 401k strategy, individuals with a solo 401k plan can make after-tax contributions to their plan and then convert those contributions to a Roth account within the plan. This allows for significantly higher contribution limits than traditional Roth IRA accounts, as individuals can contribute up to $58,000 (or $64,500 if they are over 50) in 2022.

One of the key changes brought about by the Secure Act 2.0 is the ability for individuals with an S-corp, C-corp, or LLC that elects to be taxed as an S or C-corp to participate in the Mega Backdoor Roth Solo 401k strategy. This expansion of eligibility opens up this powerful savings tool to a wider range of individuals, allowing more people to take advantage of the tax benefits it offers.

Additionally, the Secure Act 2.0 has clarified and streamlined the rules surrounding the Mega Backdoor Roth Solo 401k, making it easier for individuals to take advantage of this strategy. For example, the Act has clarified the rules regarding the timing of conversions and distributions, making it easier for individuals to navigate the process.

Overall, the Mega Backdoor Roth Solo 401k is a powerful tool for high-income individuals looking to supercharge their retirement savings. With the passage of the Secure Act 2.0 in 2022, the rules surrounding this strategy have been clarified and expanded, making it an even more attractive option for those looking to maximize their tax-advantaged retirement savings. If you have an S-corp, C-corp, or LLC that elects to be taxed as an S or C-corp, now may be the perfect time to consider implementing this strategy and taking advantage of the benefits it offers.