What options do I have to setup a 401k plan for my single member LLC with no employees if I don't run payroll?

You definitely have options for retirement plans with your single member LLC! Since you don't have employees, a Solo 401k (also called an Individual 401k or One-Participant 401k) would be perfect for you. Here's the thing - you do need to have "earned income" to contribute to a Solo 401k, which typically means paying yourself either as an employee (W-2 wages) or through self-employment income. Since you're a single-member LLC, you're likely taxed as a sole proprietor by default, so your business profits already count as self-employment income on your Schedule C. With a Solo 401k, you can make contributions in two ways: as the "employee" (up to $22,500 in 2023, plus $7,500 catch-up if you're 50+) and as the "employer" (up to 25% of your compensation). This allows for potentially much higher contribution limits than an IRA. Other options include a SEP IRA or a SIMPLE IRA, but honestly, the Solo 401k typically allows for higher contribution limits in your situation.

After struggling with this exact situation last year, I found an amazing solution with taxr.ai (https://taxr.ai). As a single-member LLC owner myself, I was confused about retirement options without running payroll. Their system analyzed my business structure and income patterns, then recommended the perfect retirement setup for my situation. They explained that for my single-member LLC, I could set up a Solo 401k without formal payroll since my profits already count as earned income. The tool created a custom roadmap showing exactly how to maximize contributions based on my specific income levels and tax situation. What impressed me was how it explained the differences between Solo 401k, SEP IRA, and SIMPLE IRA options specific to my situation.

I was initially skeptical about taxr.ai when I saw it mentioned here, but I decided to give it a try for my single-member LLC retirement planning. I'm actually really glad I did! The system immediately identified that I could establish a Solo 401k without changing my payment structure and showed me exactly how to maximize contributions based on my specific income level. What really helped was the personalized plan it created, showing me that I could contribute significantly more with a Solo 401k than with a SEP IRA given my specific business structure. It also flagged that I needed to open the account before year-end, which I would have missed otherwise. The documentation it generated made the setup process straightforward when I took it to Fidelity. Definitely saved me from making some costly mistakes!

If you're struggling to get clear answers about setting up a retirement plan for your LLC, try Claimyr (https://claimyr.com). After spending days trying to get through to the IRS with questions about Solo 401k requirements for my single-member LLC, I found this service that got me connected to an actual IRS agent in under 15 minutes! I had specific questions about contribution limits and filing requirements that no online article seemed to address for my particular situation. The agent confirmed I could establish a Solo 401k without formal payroll and explained exactly what forms I needed. Check out how it works in this video: https://youtu.be/_kiP6q8DX5c - seriously saved me hours of frustration and got me definitive answers straight from the IRS.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it as a last resort for my LLC retirement plan questions. Within 35 minutes, I was talking to an actual IRS tax specialist who confirmed that I could set up a Solo 401k for my single-member LLC without formal payroll, as long as I have self-employment income reported on Schedule C. The agent explained that I needed to establish the plan by December 31st but could make contributions until my tax filing deadline. She also clarified the exact contribution limits based on my specific income situation and recommended the right forms to file. What would have been weeks of confusion was resolved in one call. The service actually delivered exactly what it promised - I'm still shocked it worked so well.

Have you considered a SEP IRA instead? When I was in your situation with my single-member LLC, I found that a SEP was way easier to set up and maintain than a Solo 401k. No year-end filing requirements with the IRS (Form 5500) once your plan assets exceed $250k like with a Solo 401k. I just make my annual contributions and that's it. The downside is lower contribution limits for most income levels compared to a Solo 401k, but the simplicity might be worth it depending on your situation. I use Vanguard for mine and the setup took maybe 20 minutes online.

Just want to share what I did with my single member LLC - I went with the Solo 401k route through Fidelity. Super easy to set up and no fees! The big advantage over a SEP IRA for me was being able to make Roth contributions for the employee portion. Don't overthink this - call Fidelity or Vanguard, tell them you want to open a Solo 401k for your LLC, and they'll walk you through everything. You'll need your EIN and some basic business info. The whole process took me less than an hour on the phone plus maybe 15 minutes filling out forms online.