Menu Close

Learn More Archives

2018 Solo 401(k) Annual Contribution Limits

2018 Solo 401(k) contribution limits

Solo 401(K) Annual Contribution Limits To Increase in 2018

Just like the 2017 Solo 401(k), the 2018 Solo 401(k) contribution limits will increase. If you’re a plan participant under 50, you can make a maximum annual employee deferral contribution in the amount of $18,500. You can make it in pre-tax, after-tax or Roth. On the profit sharing side, the business can make a 25% annual profit sharing contribution up to a combined maximum of $55,000. This includes employee deferral. This is an increase of $1,000 from 2017. It’s 20% in the case of a sole proprietorship or single member LLC.

If you’re a plan participant over 50, you can make a maximum annual employee deferral contribution in the amount of $24,500. Again, you can make this amount in pre-tax, after tax, or Roth. On the profit sharing side, the business can make a 25% annual profit sharing contribution up to a combined maximum of $61,000, an increase of $1,000 from 2017. This includes the employee deferral. It’s 20% in the case of a sole proprietorship or single member LLC.

One of the main benefits of a Solo 401(k) Plan is the opportunity to make higher annual contributions in pre-tax, after-tax or Roth.

IRA Financial Group’s Solo 401(k) plan is unique and so popular because it’s specifically for small, owner-only businesses. There are many features of the IRA Financial Group’s Solo 401(k) plan that make it so appealing for small business owners.

Tax and Penalty Free Loan

Unlike most Solo 401(k) Plans by traditional financial institutions such as Fidelity, IRA Financial Group’s Solo 401(k) Plan allows plan participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose. This includes paying credit card bills, mortgage payments, or anything else. However, you must pay back the loan over a five-year period at least quarterly. You can do this at a minimum prime interest rate. You have the option of selecting a higher interest rate.

Checkbook Control & No Transaction Fees

The most attractive feature of the IRA Financial Group Solo 401(k) Plan is that it offers the plan participant checkbook control over his or her retirement funds. In the case of a conventional Solo 401(k) Plan by most financial institutions, the plan participant needs to make traditional investments. This includes stocks and or mutual funds. However, the Solo 401(k) Plan account must stay open at the financial institution.

With IRA Financial Group’s Solo 401(k) Plan, the plan account can be opened at any local bank, including Chase, Wells Fargo, and even Fidelity. In addition, with IRA Financial Group’s Solo 401(k) Plan, the plan participant can make almost any traditional as well as non-traditional investments, such as real estate, precious metals, tax liens, and much more. With IRA Financial Group’s Solo 401(k) Plan, the Plan participant has the freedom to make the investments he or she wants while at the same time opening the 401(k) account at any local bank. As trustee of the Solo 401(k) Plan, the Plan Participant (you) can serve as the trustee providing you checkbook control over your retirement funds. With IRA Financial Group’s Solo 401(k) Plan, making a Solo 401(k) Plan investment is as simple as writing a check.

Invest in Real Estate & Much More Tax-Free

With IRA Financial Group’s Self-Directed Solo 401(k) plan, you will be able to invest in almost any type of investment opportunity that you discover, including: real estate, tax liens, precious metals, private notes, hard money loans, private business, etc.; your only limit is your imagination. The income and gains from these investments will flow back into your Solo 401(k) tax-free.

Roth Contributions & Conversion

Unlike a conventional Solo 401(k) Plan offered by most financial institutions, IRA Financial Group’s Solo 401(k) Plan contains a built in Roth sub-account which can be contributed to without any income restrictions. In addition, the IRA Financial Group’s Solo 401(k) Plan allows for the conversion of a traditional 401(k) or 403(b) account to a Roth subaccount. However, the Solo 401(k) Plan participant must pay income tax on the amount converted.

Easy Administration

IRA Financial Group’s Solo 401(k) Plan is fast and simple. Generally, there’s no annual filing requirement unless your solo 401(k) Plan exceeds $250,000 in assets, in which case you will need to file an information return with the IRS (Form 5500-EZ). However, unlike a financial institution, the tax professionals at the IRA Financial Group will assist you in completing this form, if it is required.

Did you know?

A Solo 401(k) Plan has an employee deferral and profit sharing contribution option and the amount you can invest depends on your age.

Share the knowledge
Free Consultation