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Article Date:
January 2008

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Solo 401(k) with Your Employee-Spouse

In this article, we will explain how a proprietor (Schedule C taxpayer) can hire his or her spouse to work in the business and how to cover him or her with a solo 401(k).


To start with the big picture, assume that you own the business and that you hire your spouse. You pay your spouse $15,500 in cash wages and also cover your spouse with a family Section 105 medical reimbursement plan that’s worth about $13,500 a year. Thus, the total compensation to your spouse is $29,000. Your spouse works 800 hours a year, so this ... Log in to view full article.

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