The Solo 401k Plan is a perfect tool to help entrepreneurs and small business owners reduce their 2015 tax liability as well as save for their retirement.
With the end of the 2014 tax season finally upon us, IRA Financial Group expects to see a strong demand for its self-directed Solo 401(k) plan from the self-employed and small business owners in 2015. “Now that tax season is finally over, is a great time for entrepreneurs and small business owners to start planning for their retirement while simultaneously reducing their 2015 tax burden.”
The “one-participant 401(k) plan” or Solo 401(k) Plan is an IRS approved qualified retirement plan, which is suited for business owners who do not have any employees, other than themselves and perhaps their spouse. The Solo 401(k) plan” is not a new type of plan. It is a traditional 401k plan covering only one employee. The plans have the same rules and requirements as any other 401k plan. The surging interest in these plans is a result of the EGTRRA tax law change that became effective in 2002.
A Solo 401K Plan offers a self employed business owner the ability to use his or her retirement funds to make almost any type of investment, including real estate, tax liens, private businesses, precious metals, and foreign currency on their own while generating tax-deferred income. In addition, a Solo 401(k) Plan will allow you to make high contribution limits of up to $53,000 or $59,000 if over the age of 59 for 2015. The Solo 401(k) Plan will also allow one to borrow up to $50,000 for any purpose. In addition, the Solo 401k Plan is easy to operate. There is generally no annual filing requirement unless your solo 401(k) Plan exceeds $250,000 in assets, in which case you will need to file a short information return with the IRS (Form 5500-EZ).
A Solo 401(k) is perfect for sole proprietors, small businesses and independent contractors such as consultants. To be eligible to benefit from the Solo 401(k) plan, investor must meet just two eligibility requirements: (i) The presence of self-employment activity, and (ii) The absence of full-time employees.
“The Solo 401k Plan is a perfect retirement planning vehicle as well the most tax advantageous retirement plan for entrepreneurs and small business owners”, states Susan Glass, retirement tax specialist with the IRA Financial Group. While an IRA only allows a $5,500 contribution limit for 2015 (with a $1,000 additional “catch up” contribution for those over age 50), a plan participant of a Solo 401K Plan can make annual contributions up to $53,000 annually with an additional $6,000 catch up contribution for those over age 50 for 2015.
“Unlike a SEP which limits a small business owners contribution to 25% of his or her compensation earned, a Solo 401(k) Plan offers the plan participant the ability to make employee deferrals and profit sharing contributions up to $59,000 if the participant is over the age of 50, in addition, to providing the participant with the option of borrowing up to $50,000 for any purpose”, stated Ms. Glass.
In addition, the Solo 401k Plan offers individuals all the “checkbook control” benefits of a Self Directed IRA or Self Directed Roth IRA. With a Self Directed IRA LLC an individual can make Real Estate IRA investments tax-free.
“Now that tax season is over, it’s important for entrepreneurs and small business owners to focus on 2015 in order to maximize their tax benefits as well as begin saving for their retirement, “states 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, Dewey & LeBoeuf LLP, and Thelen LLP.
IRA Financial Group is the market’s leading “checkbook control” Self Directed IRA and Solo 401(k) Plan provider. IRA Financial Group has 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 without custodian consent.