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If you have a home business, one way you can lower your taxable income for 2010 is to open a solo 401k and make a contribution.

In the Gen X and Gen Y arena, I am seeing more and more people quit the corporate America lifestyle and venture into becoming their own business owner. This shape of a business owner can be a freelancer, consultant, or someone who actually starts up a brick and mortar operation. Many of these folks will ask questions about whether they should incorporate their business or not which I have discussed in other articles. Once they become profitable, they often ask which kind of retirement plan would suit them the best. For someone who is a business of just one, the Solo 401(k) has been around for about a decade and provides a great alternative to helping maximize your retirement contributions. Here’s a little history on the Solo 401(k) and how it can be a smart money moves for your business.

All about the solo 401k

If you’ve been a solo freelancer for any significant stretch of time, you’ve probably learned the hard way that a work project can go horribly wrong. They turn out to be life lessons in the long run, but there are ways to protect yourself.

Manny Davis
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Being a sole proprietor means that you and your business are one -- from the IRS perspective. This type of business is considered a pass-through entity (like S corps, LLCs & Partnerships), which means anything that your business earns flows through to your individual tax return. Being a sole proprietor is defined as when any individual operates a business that isn't set up as a formal entity.

Earlier this week, American Airlines decided to cut ties with Expedia.com and Orbitz.com, two of the largest travel comparison websites online.

With so many choices, how do you know which is the best 401k for your small business. Well...good news. That problem is now solved!