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I'm no CPA and am trying to determine the correct answers to basically the same question. Here's a quote directly from IRS Form 560:

"Your Keogh plan can include a cash or de-ferred arrangement (401(k) plan) under which
participants can elect to have you contribute
part of their before-tax compensation to the
plan rather than receive the compensation in
cash. (As a participant in the plan, you can
contribute part of your before-tax net earnings
from the business.) This contribution, called
an elective deferral (and any earnings on it),
remains tax free until it is distributed by the

That seems to me to say that you can, indeed, contribute to it tax-deferred on top of your employer's contributions. Now...the question is does this apply for someone who is self-employed (since you are the employer making the contributions and also the employee making individual contributions...).

I'm not sure. I've given up trying to figure all this crap out and am going to a CPA next week. I've downloaded the forms, read the books, and am still unable to determine the best solution for tax-deferring my self-employment income...
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