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Question: what percentage of your annual income can you contribute to a 401K plan? (employee contribution only, in plan without employer contribution) I would be called a 'part-time employee' with no other benefits if I choose this route.

I am wondering whether to do this...as with my self-employed status, I believe I'm contributing 25% to my Keogh. I think that is the limit.

With 401K can you also contribute to an IRA?

thanks...meowiz

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Meowiz asks:

Question: what percentage of your annual income can you contribute to a 401K plan? (employee contribution only, in plan without employer contribution) I would be called a 'part-time employee' with no other benefits if I choose this route.

I am wondering whether to do this...as with my self-employed status, I believe I'm contributing 25% to my Keogh. I think that is the limit.

With 401K can you also contribute to an IRA?


You may contribute the smaller of 25% of your gross compensation or $10K to the 401k. And yes, you can still contribute to an IRA. However, the deductibility of the IRA contribution will be contingent on your Adjusted Gross Income (AGI) and filing status. A single filer covered by a qualified retirement plan (or Keogh) through employment may deduct the full traditional IRA contribution of $2K per year if AGI is $30K or less; part between an AGI of $30K and $40K; and none when AGI exceeds $40K. The range for joint filers is $50K to $60K. If the contribution is non-deductible, then a Roth is the way to go.

Regards….Pixy
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You may contribute the smaller of 25% of your gross compensation or
$10K to the 401k


Pixy, many thanks for your response....I am nervous about some decisions I need to make this week re a new job opportunity....is the contribution amount the same then for 401K and Keogh...the limit I mean? thanks again, meowiz
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Meowiz, you asked:

Pixy, many thanks for your response....I am nervous about some decisions I need to make this week re a new job opportunity....is the contribution amount the same then for 401K and Keogh...the limit I mean?

In the 401k, the limit is 25% of your <gross>compensation earned on that job up to $10K. In the Keogh, it's 25% of your net compensation from self-employment.

Regards....Pixy
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Pixy, thanks so much for both your replies. Last night, while my husband and I were discussing this & feeling confused.....he was so surprised when I logged in and you had already responded to our questions.....he couldn't believe you were answering questions at midnight! He was speechless! many thanks....meowiz
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I just learned that the 401K at the company that wants to change my status from 'free-lance contractor' to 'part-time employee' allows a maximum contribution of 15% of gross earnings. The company does not match it at all.

My Keogh acct. that I have maintained as a self-employed independent contractor, allows a total of 25% of net earnings.

Aside from my own having to check what deductions I was able to take as a self-employed person that I would not have as a part-time employee (I can still claim some of them for other freelance jobs I occasionally do), and comparing to my tax forms and my Keogh past contributions......does anyone have any feedback about this? thanks....meowiz

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Meowiz wrote:

Pixy, thanks so much for both your replies. Last night, while my husband and I were discussing this & feeling confused.....he was so surprised when I logged in and you had already responded to our questions.....he couldn't believe you were answering questions at midnight! He was speechless! many thanks....meowiz

LOL. I'd say I work around the clock, but I can't lie. I wasn't home. I was in Utah, so it was only 10:00pm, not midnight. Still….We aim to please in Fooldom.

Regards....Pixy
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Meowiz, you wrote:

I just learned that the 401K at the company that wants to change my status from 'free-lance contractor' to 'part-time employee' allows a maximum contribution of 15% of gross earnings. The company does not match it at all.

My Keogh acct. that I have maintained as a self-employed independent contractor, allows a total of 25% of net earnings.

Aside from my own having to check what deductions I was able to take as a self-employed person that I would not have as a part-time employee (I can still claim some of them for other freelance jobs I occasionally do), and comparing to my tax forms and my Keogh past contributions......does anyone have any feedback about this?


Please help my jet-lagged ole brain out here. I have no idea in hades what you're asking. Could you be more specific in your query? If it's got something to do with 401k/Keogh contributions, maybe I can help. If it's about the change in status from contract worker to employee, someone with experience in those matters may be able to help. But I can't tell what you want right now. Sorry about that. These time zone changes just fuddle my thinking sometimes.

Regards….Pixy
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Please help my jet-lagged ole brain out here. I have no idea in hades what
you're asking. Pixy


Sorry, I will try again! The company I currently subcontract for as a freelance contractor wants to change my status to part-time employee, with only benefit being participation in their 401K plan, with max. contribution of 15% of my gross income.(They don't match it) I am trying to figure out if this is good idea, since I can contribute 25% of my NET income to my Keogh acct. as freelance contractor. I worked out some numbers and it looks like a 600.00/yr difference roughly......smaller total yearly contribution to 401K than to Keogh. Is there some other advantage to having a 401K vs. keogh that I am not considering?thanks, meowiz

(I feel like I'm making progress when I am able to confuse YOU!) ;-)
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Meowiz asks:

Sorry, I will try again! The company I currently subcontract for as a freelance contractor wants to change my status to part-time employee, with only benefit being participation in their 401K plan, with max. contribution of 15% of my gross income.(They don't match it) I am trying to figure out if this is good idea, since I can contribute 25% of my NET income to my Keogh acct. as freelance contractor. I worked out some numbers and it looks like a 600.00/yr difference roughly......smaller total yearly contribution to 401K than to Keogh. Is there some other advantage to having a 401K vs. keogh that I am not considering?thanks, meowiz

(I feel like I'm making progress when I am able to confuse YOU!) ;-)


Hey, it's easy to confuse Pixy. In fact Mrs. Pixy is convinced that's my permanent state of mind. But that doesn't say much for her considering who she's married to does it?

I don't know what your choices are in the 401k, but seems to me if you want the tax deferral you should use it. You can go up to a max of $10K or 15% per year tax-deferred there plus a max of $30K or 25% in your Keogh on your net self-employed income. If you just use the Keogh, you miss the opportunity to defer the 401k money because your part-time earnings won't count as self-employed income.

Regards….Pixy

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Pixy, many thanks for your patient & helpful responses to my questions. meowiz
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