Date: Sun, 19 Aug 2007 09:25:40 -0500
From: Will Trice 
Subject: Re: Opinions and Suggestions Sought....
Newsgroups: misc.invest.financial-plan
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Mark Bole wrote:

> Elsewhere in this thread the dual role of a sole proprietor is 
> mentioned, the "employee" hat and the "employer" hat.  Although everyone 
> seems to have their own version of a Solo 401k worksheet, I do think 
> that strictly speaking the employee contribution (the one that goes up 
> to $15,500) needs to be in the form of a regular salary reduction, in 
> other words the contributions should be made in equal installments 
> throughout some portion of the year as if they were a payroll deduction, 
> and definitely before Dec 31st.

I looked into this once, and I think that a sole proprietor is treated 
as having received a yearly salary on the last day of the year, so that 
the entire employee contribution could be made to a solo 401(k) at the 
end of the year instead of through regular salary reductions. 
Presumably this is because the sole proprietor doesn't necessarily have 
a good handle on the exact level of profit through the year?

-Will