As a business owner earning self-employment income, you may be able to participate in your Guideline 401(k) plan by contributing to your account via an owner contribution.
If you are paid via W-2, on the other hand, you can only make deferrals to your 401(k) directly through payroll. Learn if you are eligible to contribute through an owner contribution here.
How to schedule an owner contribution
If you are eligible, you can schedule an owner contribution from your participant dashboard. An administrator will not be able to initiate this request on your behalf.
To access your owner contribution options, go to the Contributions tab from the main menu.
You will have the option to set up a recurring and/or one-time contribution:
Recurring contributions
In the Recurring section, choose your contribution frequency (pay period, weekly, biweekly, semi-monthly, monthly, or quarterly). You can also select the day of the week you would like the contributions to occur as well as the start date.
Enter the traditional and/or Roth contribution amounts you wish to make regularly.
Click “Save.”
One-time contribution
Within the One-time section, click the “Schedule a new contribution” button.
Enter the tax year, withdrawal date, and the traditional and/or Roth amounts for your one-time contribution.
Review your details for accuracy, then click “Schedule contribution.”
If you do not see the owner contribution options on your participant dashboard, you either are not listed as earning self-employment income in Guideline or your entity type doesn’t allow for owner contributions (e.g., S Corporations).. We suggest you reach out to your plan sponsor if you believe you should have the ability to make owner contributions.
When should owner contributions be made?
To make an owner contribution, contribution details must be submitted by December 31 of the applicable year.
If you intend to contribute for the current plan year but wish to defer the actual contribution until the following year (after your taxes are finalized and self-employment income is determined), you may select a withdrawal date in the subsequent year. Guideline requires that this date be no later than March 15 of the following year. If your compensation is not sufficient to support the contribution, Guideline will process a refund of the contributions.
It is crucial that you submit your contribution request for the current plan in your Guideline participant dashboard no later than December 31 to establish your intent.
Who pays for owner contributions?
Owner contribution funds are pulled from the company’s default bank account on file with Guideline.
Once you set up owner contributions, we recommend informing your finance team so they are aware of the upcoming withdrawal.
How to cancel or reschedule owner contributions
To cancel scheduled contributions, you must return to the Contribution page and set the contribution dollar amount to 0. You may also reach out to Guideline at least two business days prior to the scheduled draw to request that the transaction be canceled (unless the contribution is for the prior plan year).
To reschedule a contribution, navigate back to the Contribution page and adjust the date you want the funds to pull. We will send a task notification early in the following year to confirm the amount you will be including on your self-employment income tax filing (your compensation for purposes of the plan) so that we may calculate nondiscrimination test results and any employer contributions accordingly.