2015 Solo 401(k) Plan contributions limits to increase to $53,000 or $59,000 if over the age if 50 and continue to be more popular than the SEP IRA for the self-employed.
IRA Financial Group, the leading provider of self-directed solo 401(k) plans has seen a surge in demand from self-employed and small business owners looking to establish self-directed solo 401(k) plans in light of the higher maximum contribution limits.
Under the 2015 Solo 401(k) contribution rules, a plan participant under the age of 50 can make a maximum employee deferral contribution in the amount of $18,000 to an IRA Financial Group solo 401(k) Plan. That amount can be made in pre-tax or after-tax (Roth). On the employer profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $53,000, an increase of $1,000 from 2014.
For plan participants over the age of 50, an individual can make a maximum employee deferral contribution in the amount of $24,000. That amount can be made in pre-tax or after-tax (Roth). On the employer profit sharing side, the business can make a 25% (20% in the case of a sole proprietorship or single member LLC) profit sharing contribution up to a combined maximum, including the employee deferral, of $59,000, an increase of $1,500 from 2014.
The annual Solo 401k contribution consists of two parts, an employee salary deferral contribution and an employer profit sharing contribution. The total allowable contribution limits are combined to get the maximum Solo 401K contribution limit.
Whereas, under the 2015 SEP IRA contribution limits, the maximum one can contribute to a SEP IRA cannot exceed the lesser of: (1) 25% of compensation, or (2) $53,000 for 2015 and there are no catch-up contributions for individuals over the age of 50.
According to Susan Glass, a retirement tax specialist with the IRA Financial Group, “establishing a self-directed solo 401(k) Plan versus a self-directed SEP IRA provides many exciting advantages, including the ability to make employee deferrals in pre-tax or Roth of up to $18,000 or $24,000 if over the age of 50, borrow up to $50,000 tax-free and penalty-free, and the ability to buy real estate with a non-recourse loan with any tax.”
IRA Financial Group’s solo 401(k) plan is unique and so popular because it is designed explicitly for small, owner only business. With IRA Financial Group’s solo 401K plan, self-employed individuals or small business owners with no employees can benefit by making high annual contributions – up to $53,000 – with an additional $6,000 catch-up contribution for those over age 50, make traditional as well as non-traditional investments, such as real estate, as well as borrow up to $50,000 or 50% of their account value tax-free and penalty free. IRA Financial Group’s self-directed 401(k) plan is a trustee directed plan meaning the trustee and not the custodian is in charge of making investment decisions on behalf of the plan. “The 2015 increase in the solo 401(k) plan contribution limits has created strong demand from self-employed individuals and small business owners looking to boost their retirement funds and make pre-tax as well as after-tax contributions,” stated Ms. Glass.
The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP and Dewey & LeBoeuf LLP.
IRA Financial Group is the market’s leading “Checkbook Control” Self Directed IRA and Solo 401k Plan Facilitator. We have helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate tax-free and without custodian consent!