A comprehensive 2018 Tax Filing Calendar for self-directed retirement plans
, businesses, exempt organizations, trusts and estates, and individuals. Continue reading “Self-Directed IRA & 401K Investor 2018 Tax Filing Calendar”
Checkbook Self-Directed Solo 401k Plans
, also known as a Checkbook QRP
, provide a great feature that can be leveraged in so many ways: A Checkbook Solo 401k Loan
. The loan proceeds can be used to finance anything you’d like
and the interest payments are made to yourself
In fact, Checkbook 401k Loan Interest Payments can be viewed as a way to make backdoor contributions – beyond the Solo 401k contribution limits
– to your Checkbook Solo 401k tax advantaged retirement accounts. Once those interest payments are paid to your Solo 401(k) plan or QRP, those funds become additional plan assets that can be invested tax-free.
Do you have debt to pay off? Do you want to purchase a new vehicle? Pay for education? Or, would you like to make an investment outside your Solo 401k using Solo 401k funds? The Checkbook Control 401k loan feature is your best option. In this post will cover all that you need to know to legally take advantage of this Checkbook QRP feature. Continue reading “Solo 401k Loan FAQ & Answers”
What type of funds can be contributed to a Solo 401k Roth account?
There are many sources of funds for Self-Directed Solo 401k plans
and most – but not all – can be contributed to the Roth Solo 401k
subaccount. Following are eligible sources of funds for a 401(k) Roth account: Continue reading “Roth Solo 401k Contribution Guide”
What is a Roth Solo 401k Plan? What is a Solo 401k Plan?
Understanding Roth Solo 401(k)s
requires that we first understand the basics of traditional Solo 401k plans
401K Plans, creatively named after Section 401(K) of the Tax Code
, are Defined Contribution qualified retirement plans
that allow employees to choose (“elective
deferral”) to contribute all or part of their compensation to a tax-advantaged account and exclude the amounts contributed from current taxable income. The tax code calls this a “cash or deferred arrangement,” or CODA. A 401k Plan can be combined with other types of plans, such as Defined Benefit and Cash Balance Plans
, to maximize tax deductions
and allow for multiple forms of plan contributions. The typical 401(k) Plan provides for employer profit sharing contributions
, in addition to employee contributions
. Self-Directed Solo 401(k) Plans
are 401(k) plans for businesses that don’t have full-time employees other than business owners and their spouses, which can be designed to include very attractive features such as Roth 401k Contributions and After-Tax Employee Contributions.
What is a Roth Solo 401k Plan?
Continue reading “Solo 401K Roth Contribution Q&A”
A Self-Directed Solo 401k Plan With Checkbook Contro
l is a powerful tax and investment tool that can be used only by those with self-employment income and no full-time employees. It is a Qualified Retirement Plan
, or One-Participant 401(k) QRP
, covering a business owner with no employees, or that person and his or her spouse. These plans have the same rules and requirements as any other 401(k) QRP, but doesn’t need to perform nondiscrimination testing for the plan, since there are no employees who could have received disparate benefits. This exemption from non-discrimination testing empowers you to maximize the incredible strategies available to QRPs for your financial benefit. Following are common questions and answers regarding SoloK eligibility, benefits, and operations. Continue reading “Self-Directed Solo 401k Common Questions”
Private Lending IRAs and Checkbook Control
is the ideal investment for an IRA…and less than ideal outside of an IRA.
Understanding why that’s the case – and why a checkbook control IRA
is crucial to maximizing private lending
investment returns – requires an understanding of tax
concepts. In this post we’ll cover the income tax treatment of private lending inside and outside of retirement accounts (IRAs
, Solo 401k plans
) and why a Self-Directed IRA with Checkbook Control
is the IRA you need for private lending. Additionally, if you’re a real estate investor, you’ll learn how to get funding for deals by leveraging the IRAs of private lenders. Continue reading “Private Lending IRAs: The SDIRA Checkbook Retirement Account Advantage”
In this post you’ll learn how to use a Solo 401k to get up to $120,000 into Roth retirement accounts (Mega Roth
), annually. If you don’t already know the value and power of that – this is a must read. If you already know and appreciate the value of tax-sheltered & tax-free Roth retirement accounts, this post is a must-read. Continue reading “Mega Backdoor Roth Solo 401k vs. Checkbook IRA”
I’ve got a pal who whose got a great gig going. It’s a “side-business” that nets him about $120K a year. Prime candidate for an Individual K
. He’s got lots of discretionary income to invest
and needs to reduce his current taxable income
. At his job (read: W-2) he gets to invest his 401k
in loaded mutual funds to which he’s been reducing his contributions as he increases his allocation to real-estate and other alternatives
Sounds like a great candidate for a Checkbook Control Solo 401K
! Between him and his spouse they could sock away tens of thousands of dollars in their Solo K and invest tax free in real estate
(remember no UDFI on leveraged real-estate in a 401k
!). BUT, NOT SO FAST. Here’s the catch, my buddy’s W-2 comes from his Dad’s company, which has several hundred people on payroll and the IRS has got a tool known as the Controlled Group Rules
which result in ownership of businesses being attributed
to relatives for tax purposes. This could potentially make a child’s Qualified Retirement Plan – QRP – subject to anti-discrimination testing based on their parent’s employees, making them ineligible for a Solo 401k
– intended for an owner-only business, with no employees.
To resolve this matter, Congress provided a handy reference known as the Internal Revenue Code (IRC). The Internal Revenue Code defines family relationships in several places…so we’ve got to interpret the conflicting definitions and determine which of those apply. (Hint: It depends…)
[If “con” is the opposite of “pro,” what is the opposite of “progress?”….answer at the end of the post:)
] Continue reading “Solo 401K Eligibility: Are Parents and Children Related? Controlled Groups”