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How small business owners can participate in Guideline 401(k) plans
How small business owners can participate in Guideline 401(k) plans
Updated over a week ago

As an owner of a sole proprietorship, partnership, limited liability company (LLC) or S-corp, you may be able to participate in your company’s 401(k) plan, depending on the type of income you receive.*

W-2 employees

If you are a W-2 employee, including S-Corp and C-Corp owners, you will make deferrals up to the annual deferral limit through payroll. Employer match and profit sharing contributions will be made at the same time as other employees in the plan.

Employees earning self-employment income (SEI)

If you are an SEI owner who is not issued a W2 and you receive guaranteed payments or self-employed income, you are still bound by the annual deferral limit and can defer up to the annual limit or 100% of guaranteed payments per year, whichever is less.

SEI owners can make owner’s draw contributions within Guideline or, if you have a deferral rate set in Guideline, you can apply that rate to guaranteed payments you receive in payroll as long as your company is an eligible entity type that allows owner’s draws.

Elective deferral contributions based on self-employed income as reported on K-1 or Schedule C must be elected by December 31 of the applicable year and must be contributed to the plan before March 15 for Guideline plans.

* This information is provided for general education purposes only and does not take into consideration your specific circumstances. You should contact a tax professional to determine what types of contributions you are eligible to make to your company’s 401(k) plan.

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