Fed. Gov. TSP & Individual 401 Contribution Limits

I have a friend [cc'd to this] who asked me a tax related question. He makes the maximum annual contributions [$20K+] to the Federal Goverment TSP retirement savings programs, which is similar to employer 401k plans. He also has self-employment income and an individual 401k plan.

Are annual combined contributions to the Fed. TSP program and individual 401k plans limited to the $20K+ annual limit as if both were employer 401k plans, or do annual contribution limits apply to each separately?

Thanks in advance,

Ron Sheldon

Reply to
Ron Sheldon
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Annual employee contributions to the employer plan (401k or TSP) are limited to $15,500 (w/o catchup). Any amount your friend contributes to the TSP reduces the amount he can contribute to his solo 401K. That does not stop one from making an employer contribution to the solo 401K. The employer contribution is limited to 20% of the business income (which is business income minus half of the self-employment tax), up to a maximum of $45,000 or the business income whichever is less.

Reply to
Alan

The annual *salary deferral* contributions are integrated. So he can only make a total of $15,500 (or $20K+ if he's eligible for "make-up" contributions) between the plans. So if he maxed out his TSP contrib, he can't make any deferral contribution to his solo 401(k).

However, he can still make the full profit-sharing contribution (max of 20% of net self-employed earnings) to his solo 401(k) and can do so even though he received employer contribs from the Federales.

-- Rich Carreiro snipped-for-privacy@rlcarr.com

Reply to
Rich Carreiro

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