Reporting Solo 401k plan contributions via your payroll

If you have payroll set up, you should report all Solo 401k contributions you've made on the Carry website through your payroll. This is required so that your year-end W-2 is correct.

The exact process will depend on your payroll provider, but there are broadly two ways to do it:

Make contributions into Carry on the Carry website directly from your employer bank account throughout the year, and ensure you have a matching employee deduction or employer contribution in your payroll provider. Note that the Solo 401k funds typically do not flow through your payroll provider, but are instead made directly into Carry from your employer bank account.

These contributions can be "one-time" contributions that you log into Carry to make (twice a month, or on whatever frequency you run payroll), or they can be "recurring" contributions. Keep in mind that you will want to monitor recurring contributions to ensure that they do not go over your annual limits.

Employee contributions are typically entered as employee elective salary deferrals, and employer contributions are typically called employer profit-sharing contributions, but the exact terminology may vary based on your payroll provider.

Employee optional after-tax (aka Mega Backdoor Roth conversion) contributions are typically not reported separate from income on payroll, since they are after-tax.

Instead of doing contributions throughout the year, make contributions at the end of the year on the Carry website (typically December, but check with your payroll provider for their deadline).

This eliminates any work you may need to do throughout the year, and has the benefit of dramatically decreasing the likelihood you accidentally over-contribute (since contributions are based on a percentage of your income), but has the disadvantage of having the Solo 401k be invested for less time.

As always when working with an external provider, we recommend reaching out to them or reviewing their documentation to ensure that you are set up correctly on their end. Most providers will also have a year-end reconciliation process that you can run, to capture any "off-platform" 401k contributions and make sure the W-2 will be accurate when issued.