On 4/13/21 12:55 PM, ira smilovitz wrote:

On Tuesday, April 13, 2021 at 2:59:50 PM UTC-4, Maria Ku wrote:

On Friday, April 9, 2021 at 1:28:43 PM UTC-7, Michael Bratt wrote:

I think I'm starting to confuse myself with this topic.

Client is retired from local school system and receives a monthly pension. >>> She is now self-employed as a counselor, working primarily from home, grossing about $30K.

She and her husband also both receive Social Security; they file MFJ; their MAGI is about $113,000. She is age 71, he is age 72.

Can she contribute to an IRA? Neither are currently working for an employer and covered by a retirement plan. The age limit for IRA contributions has been removed.

Or, is her only option to defer taxes through a Solo401(k)?

Either way, she will be subject to RMD requirements at age 72. Will she still be able to contribute to an IRA and/or Solo401(k) in the same year she is making RMD withdrawals?

Is the deadline for opening a Solo401(k) account extended to May 17 (or Oct 15, if an extension requested)?

As long as she or her spouse have enough "earned" income (W-2 or Sch C), they should be able to contribute to both an employer plan (SEP IRA or Solo 401(k)) and an individual IRA (Traditional or Roth), even while being required to take RMDs.
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You need to do some additional research if you choose the solo 401(k) route. It's been a number of years since I had a client open one, but at that time the account needed to be established before the end of the calendar year for which contributions

were being made, although the actual funding could occur up to the extended filing deadline of the tax return. I don't know if the establishment deadline requirement has been relaxed due to COVID or other changes in the tax law.

Ira Smilovitz, EA
Leonia, NJ

I'm 100% sure that a Solo 401(k) is now on the same playing field as a
SEP-IRA. You can adopt and contribute up to the filing deadline
including any extension. I am 95% sure the change for the Solo 401(k)
was buried in the SECURE Act.

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