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Meowiz asks:

Thanks, Pixy for your response.....another 3 questions..1).if I am classified by this co. as a 'part-time' employee, and they are taking out taxes and paying half of FICA, can I choose not to participate in their 401K and instead contribute to my own Keogh? I ask this because I would prefer to keep the independence of not HAVING to work 1000 hours for only them.

Yes, but you'll receive wages from them as a W-2 employee. That precludes using that money as wages for the Keogh contribution because those don't count as self-employed income.

2) Also, if we were to move before I work 1000 hours, wouldn't I lose all the annual returns?

Yes, you would. All you will get back is the ineligible contribution money because you failed to work the 1000 hours necessary to become a plan participant.

3) And do they legally have to return all my contributions if I don't work 1000 hours in a year?

Yes they do or the plan will be disqualified because you are not an eligible participant unless you complete at least 1000 hours of work.

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