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KcofMaine, somewhat concerned, wrote:

You wrote...
As the employER, you will have to contribute in unprofitable years as well whether you use a nonelective contribution or match.

It is my understanding from a couple of brokerages, and from the IRS, that IF one's business is a sole prop., and there are no employees except the owner, then there are no necessary employer contribtions needs..IF the 3% matching election is made by the employer & the employee (also the owner/employer...same person) doesn't defer any income in a lean year. Right or wrong?

Fear not. If you have other employees, what I said will apply. But if you can't pay yourself as the only employee, then as the employer no contribution will be due. The brokers are correct.


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