I started working as a self-employed contractor in December and made a $1000 initial funding for 2024 as an employee. I realize that the client pays me in January for my December’s work, so my business income is $0 and I’m not eligible to make any contributions for 2024, and thus I over-contributed to my Solo 401k by $1000.
I read something about being able to remove my excess contributions before my tax deadline. I also heard that another option to fix this over-contribution is to simply change tax year for this contribution to 2025 (and keep my own records), since a brokage doesn’t report to IRS.
Could I just now contribute $1,000 toward my 2025 tax year, and simply note in my records that the $1,000 in question was actually for 2025 (not 2024) contribution?
If allowed, this would mean I haven’t actually made an over-contribution at all and owe no penalty. But is it allowed? In the brokerage in which I contributed to my Solo 401K, I filled out an initial funding form, entering ‘$1000’ as an employee contribution and ‘2024’ as a tax year. That said, my understanding is that since the brokerage is not the record-keeper, none of those designations mean anything — it’s my responsibility to keep records of how much I contributed for each year. Is that true?
