Solo 401k confusion

[LCP]

Being familiar with 401k plans, I'm trying to understand the solo 401k.

I'm used to elected deferrals being a percentage of earnings and there usually being an employer match of some sort.

With the solo 401k I'm getting the idea that a deferral percentage need not be elected, that the amount (subject to maximums) can be decided after the end of the year and paid by 1/31, and that there is no "match" as such. Instead the employer portion is determined based on profits and the deferral has no bearing on it.

It appears that the sole owner could make a small (say $1000) payment by 1/31/09 and then make a larger (25% of profits) employer deposit by the due date of the return.

[Burke]

The "employee/employer" contributions (subject to the annual limits as you stipulate) are based on total net earnings for SE purposes after deduction of the 1/2 SE tax.

Example: Net profit of $60,000 after ded for 1/2 SE tax. Over-50 TP can contribute $20,500 for 2008, and company can contribute $12,000 (25% of $60,000) up to due date for return, a total of $32,500. If net profit is $100,000, max will be capped at $46,000.

[geekgirldany]

401K Help Center has a great comparison chart that helped me alot with tax planning this year.

http://www.401khelpcenter.com/pdf/retirement_plan_comparison.pdf

[LCP]

Thanks for the input..... still a little confused though. The plan is up and running so that is not an issue. Net profit is about $50k.

1. Can the "deferral" be determined at the end of the year absent any "elections" made during the year? In any amount from zero to the max?

2. Can the "match" be made prior to filing the return independent of the amount that was deferred? Ex. 25% of profits whether or not any deferrel (employee contribution) was made.

[LCP]

And another thing ..........

Can the employee put all of his deferral into a Roth account but the employer portion go 100% to the traditional 401k account in order to be deductible?