Accounting, Payroll & Pension Issues/Solo 401(K) Eligibility

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Expert: - 1/18/2012


Question
I am a US Citizen working in the US out of my home. I am employed by a Canadian company headquartered in Ontario and paid in US dollars. I am the only US-based employee so the company does not have a benefits plan I can participate in. Are there US-based savings plan programs I could participate in? Am I eligible for anything like a Solo 401(K) plan in the US?
Thank you.

Answer
Hi John,

Thanks for your question.

If your employer does not offer you a retirement plan, then your retirement plan options as an employee are limited.  You will be entitled to setting up a traditioal IRA and if you qualify, a Roth IRA.

Solo 401(k).  In order to qualify for a solo 401(k), (1) you need to be self-employed (sole proprietor, consultant, or independent contractor) and (2) have no full-time employees.  If you are able to have your status change from a W-2 employee to a 1099 independent contractor, then you will be entitled to setting up a Solo 401(k).

Wish you the best.

Regards,
Paul Sid, CPA

Accounting, Payroll & Pension Issues

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Paul Sid, CPA CFA

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I am a CPA and CFA with more than 20 years of assisting others to address a wide variety of tax and financial issues, including: (a) tax and timing for conversion of various retirement vehicles including 401(k), traditional IRA, and Roth IRA; (b) starting date considerations for social security benefits and related tax liabilities; (c) computation of book and tax basis, gains and losses on investments, §1031 exchanges; (d) tax benefits and deductions on principal residence, vacation homes, and investment properties; (e) acquisitions of business properties, computation of bonus depreciation, and MACRS depreciation; (f) tax as related to various martial issues, including dependences, noncitizen spouses, and divorce settlement; (g) review of college funding options and tax attributes; (h) tax computation and investment considerations for fixed and variable annuities; (i) tax considerations relating to gifting by parents and grandparents; (j) tax on employee benefits programs including retirement plans, health insurance, and other benefits; (k) tax on inherited assets including assets, insurance, and other assets.

Paul Sid, CPA CFA
FinancialEdge.net

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I have over 20 years of financial, accounting, and tax experience in working with individuals and fortune 500 companies.

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BS Accounting, CPA, CFA

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