Home  >  Financial Articles and Q&A  >  Can I open a solo 401k and/or solo 401k ROTH?

Can I open a solo 401k and/or solo 401k ROTH?

1) I am self employed 2) my business is in Mexico but I reside in the USA. 3) Business is only registered in Mexico, and I am the sole employee. 4) On my taxes, I declare my earnings as Foreign Earned Income using form 1116 (Foreign Tax Credit). 4) Age: 70, single.

can I create a self-proprietorship retirement account even though my business is outside the USA? If so, could I use my SS# instead of EIN #?

Feb 23, 2014 by Gerardo from El Paso, TX in  |  Flag
1 Answer  |  5 Followers
Follow Question
1 vote

The US government treats all of its citizens the same for both taxes and benefits (tax savings plans). So assuming you are a citizen then yes, you can create a plan.

However, contributions can only be made on non-excluded earned income. Therefore, if you either have no earned income or if you’re excluding all earned income from U.S. tax using the Foreign Earned Income Exclusion (FEIE) and the Foreign Housing Exclusion (FHE), you cannot contribute to a Solo 401(k)?and there will be penalties if you do. You could revoke your FEIE but there are many implications of this as well.

There are a lot of other issues here, so I would need to understand your situation in greater detail before making specific recommendations. This may be helpful http://www.irs.gov/pub/irs-pdf/p560.pdf

Comment   |  Flag   |  Feb 25, 2014 from Minneapolis, MN

1|600 characters needed characters left