I own a small business. Can the SBO-401(k) work for me?

By Denise Appleby AAA
A:

The SBO-401(k) can only be adopted by businesses in which only the business's owners are eligible participants in the plan. The ideal candidate for the SBO-401(k) is an employer who has employees, they do not satisfy both criteria for being included in the plan. To be eligible, a person must work at least 1,000 hours each year, but there may be age restrictions. To be sure, you should check the provisions of the SBO-401(k) plan document that you intend to adopt. Most of these documents include a hard-coded definition of "eligible employee".

'

Note: Bear in mind that if you have other businesses, you may also need to take those businesses into consideration. Ownership in other businesses may affect your eligibility to adopt a SBO-401(k) plan.

To learn more, read 401(k) Plans For The Small-Business Owner and Plans The Small Employer Can Establish.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. Does location matter for taxes when calculating gross sales?

    Learn more about gross sales taxes and how merchants are impacted by them. Find out if different business locations are impacted ...
  2. What's the difference between the production cost and the manufacturing cost?

    Learn more about fixed and variable expenses incurred by businesses. Find out how production and manufacturing costs impact ...
  3. What is the difference between speculation and gambling?

    Learn about speculation and gambling, examples of speculation and gambling, and the main difference between a speculator ...
  4. How can I set up an accrual accounting system for a small business?

    Read about some of the steps a small business should follow when establishing an accrual accounting system to track revenues ...
RELATED TERMS
  1. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  2. Freelancer

    A freelancer is an individual who earns money on a per-job or ...
  3. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  4. Donation-based Crowd Funding

    Donation-based crowdfunding is a way to source money for a project ...
  5. Age Discrimination In Employment Act Of 1967

    A federal statute protecting "certain applicants and employees" ...
  6. Elder Care

    Elder care, sometimes called elderly care, refers to services ...

You May Also Like

Related Articles
  1. Professionals

    Target Date Funds: More Popular, Cheaper ...

  2. Entrepreneurship

    The Story Behind Apple's Success

  3. Entrepreneurship

    The Story Behind Google's Success

  4. Mutual Funds & ETFs

    This Gold ETF is Fine for Traders, Not ...

  5. Entrepreneurship

    How To Profit From Solar Energy

Trading Center