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Financial Planning / Tax Strategies


Subject:  Solo 401K / Tax Question Date:  12/27/2004  8:24 PM
Author:  storygirl Number:  74972 of 127623

Yes, I have left it until the last minute, but I really didn't know that self-employed 401Ks existed until a couple of days ago. Here's my very basic question:

I'm self-employed and my income goes up substantially this year because I took the cash value of a employee stock plan I inherited but could not rollover into an IRA. It's around $60,000 (and 10% tax was deducted before sending me proceeds) which brings my income up to the highest tax rate. But, if I open a self-employed 401K and put a chunk of inherited money in there, will that keep me from being taxed this year on that very same money? I suspect I have to pay those taxes no matter what, but wonder if you guys know otherwise. I'd have to open up a solo 401K before the end of the year, so that clock is ticking.

Thanks very much for any advice you can offer.
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