Dec 29

How to Select the Best Solo 401(k) Provider

Selecting the best Solo 401(k) provider is an important decision that should be researched thoroughly.  Below are several tips to help you select the best Solo 401(k) Plan provider for your self-employed or small business retirement plan.

1. Always Make Sure You Are Working With a Tax & ERISA Professional: There are several companies on the internet that advertise themselves to be solo 401(k) plan providers and experts, however, in most cases, the people that would be involved in drafting your Solo 401(k) plan documents as well as advising you are not tax attorneys or even tax professionals. Working with an experienced tax & ERISA professionals when looking for a Solo 401(k) Plan provider is crucial in ensuring that your plan will be properly setup as well as remain in full IRS compliance. The Solo 401(k) plan is based on the rules found in the Internal Revenue Code, which can be quite complicated to the non-tax attorney. Therefore, it is strongly advisable to work with a Solo 401(k) Plan provider, like the IRA Financial Group or Bergman Law Group, to establish your IRS approved Solo 401(k) Plan. Relying on the advice of a document processor or no-tax professional when it comes to establishing and maintaining your retirement plan puts your retirement future at great risk. Too many times, plan participants have unknowingly violated IRS rules when operating their Solo 401(k) Plan because a plan provider representative that was not qualified to provide relevant tax advice gave them inaccurate and incomplete tax advice or drafted the plan documents incorrectly. Make sure this does not happen to you – work only with qualified 401(k) plan tax & ERISA professionals who have been specifically trained on the special tax aspects of the Solo 401(k) Plan to establish and maintain your Solo 401(k) Plan.

2. Open Architecture Self-Directed Solo 401(k) Plan Is the Way to Go: Not all Solo 401(k) Plans are the same.  Most Solo 401(k) Plans offered by a bank or financial institution are not self-directed.  What that means is that you will be restricted to making the investments offered by the bank or financial institution and will not be permitted to purchase real estate, precious metals, private business investments, option & currency trading, hard money loans, etc.  Once you adopt a Solo 401(k) Plan, you should have a plan that features all the IRS options available for qualified retirement plans, including the ability to make non-traditional investments, such as real estate. IRA Financial Group offers an open architecture Solo 401(k) Plan that allows you to make any IRS approved investment without requiring the consent of a custodian. As trustee of your Self-Directed Solo 401(k) Plan, you will have “checkbook control” over your plan funds and will have total control over plan assets.

How to Select the Best Solo 401(k) Provider

3. Take Advantage of Your Right to Borrow up to $50,000 from Your Plan: Not all Solo 401(k) Plans include a loan feature, which is an IRS approved feature. 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, including paying credit card bills, mortgage payments, personal or business investments, a car, vacation, or anything else. The loan has to be paid back over a five-year period at least quarterly at a minimum prime interest rate (you have the option of selecting a higher interest rate).

4. Be Sure You Have a Roth Option: Most Solo 401(k) Plan providers do not allow for Roth (after-tax) contributions. 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, most Solo 401(k) plan providers do not allow for in-plan Roth conversions or rollovers.  Whereas, IRA Financial Group’s Solo 401(k) Plan allows for in-plan Roth conversions. However, the Solo 401(k) Plan participant must pay income tax on the amount converted.

5. Ongoing Tax & 401(k) Plan Support is a Must: Just because your Solo 401(k) Plan has been established does not mean that you no longer need any ongoing tax and ERISA support.  Most Solo 401(k) Plan providers are headed for the exit once the plan has been established.  As you begin administering your Solo 401(k) Plan, whether it involves making employee deferral or profit sharing contributions, making a non-traditional investment, taking a plan loan, or considering a Roth conversion, you will want to be able to have the ability to consult with a specialized 401(k) Plan tax professionals and get specialized tax and ERISA advice based on your particular retirement or tax question.  The ongoing maintenance of the Solo 401(k) Plan is crucial in making sure your Solo 401(k) Plan remains in IRS compliance and that the IRS respects all your plan contributions and investment gains. Working directly with a 401(k) plan tax professional that has been specifically trained on the special tax aspects of the Solo 401(k) Plan will help keep your Solo 401(k) plan in full IRS compliance.

6. Take Control of Your Solo 401(k) Plan from the Plan Provider: Most Solo 401(k) Plan providers will require that you hold the plan assets at their institution. With IRA Financial Group’s Self-Directed Solo 401(k) Plan, you can hold the plan assets at the bank of your choosing and gain “checkbook control” over the funds. With IRA Financial Group, making an investment is as easy as writing a check.

7. Stay Away from Plan Providers who Outsource Their Plan Maintenance Services: Most Solo 401(k) Plan providers do not assist or offer advice with respect to the maintenance and administration of a Solo 401(k) Plan, including the completion of the IRS Form 5500-EZ. They generally refer all questions to an outside tax attorney or accountant. IRA Financial Group offers all of its Solo 401(k) Plan clients direct access to its in-house retirement tax professionals and CPAs regarding maintenance or administrative questions concerning the plan. Whether it’s answering a question about a plan feature, investment, an update in the law, or with help completing the IRS Form 5500-EZ, you will work one-on-one with an IRA Financial Group retirement tax professional and CPA who are familiar with your plan and retirement goals.

8. Stay Away from Excessive Annual Fees: Since most Solo 401(k) Plans have less the $250,000 in plan assets, there would be no annual filing requirement for the plan. Hence, why pay excessive annual administration fees to a plan provider who will not be offering you or your plan any value or services. Even if your Solo 401(k) Plan has in excess of $250,000 of plan assets, the IRS Form 5500-EZ is quite simple to complete and should not be too costly.

9. Don’t Take Tax Advice from a Salesperson – Talk Directly with a 401(k) Plan Tax Professional or CPA: Many times a salesperson or representative of a Solo 401(k) Plan provider will offer you tax or ERISA guidance with respect to a 401(k) plan feature or an investment without lacking the adequate knowledge or expertise. Make sure you are only receiving plan related advice or information from a specialized 401(k) plan tax professional. Too many times, plan participants have made improper plan contributions or invested in a prohibited transaction because they were mislead by a plan provider representative that was not qualified to provide proper tax advice regarding the unique features of the Solo 401(k) Plan. Working directly with a 401(k) plan tax professional that has been specifically trained on the special tax aspects of the Solo 401(k) Plan to establish and maintain your Solo 401(k) Plan is the only way you can guarantee your plan will remain in full IRS compliance and that you will not be engaging in any plan activities not approved by the Plan or the IRS.

To learn more about the importance of selecting the right solo 401(k) plan provider, please contact a retirement tax expert at 800-472-0646.

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Sep 06

Why Choose IRA Financial Group for Your Individual 401(k) Plan?

An IRA Financial Group Individual 401(k), also known as a Solo 401(k), offers lots of benefits.  Here are just a few –

Excellence: Our in-house retirement tax professionals have worked at some of the largest law firms in the United States, including White & Case LLP and Dewey & LeBoeuf LLP. Their tax and ERISA experience is unmatched in the industry and is the reason we are considered the leading facilitator of true “Checkbook Control” Solo 401(k) Plan structures.

Why Choose IRA Financial Group for Your Individual 401(k) Plan?Work directly with our in-house retirement tax professionals to set-up an IRS compliant Solo 401K Plan. Our clients have direct access to our in-house retirement tax professionals to ensure that the Solo 401K Plan is customized to satisfy the client’s retirement and investment objectives. In fact, we encourage our clients to contact our in-house retirement tax professionals with any tax and ERISA questions concerning the structure or a proposed investment to ensure full IRS compliance.

Our Solo 401K experts will take care of the entire set-up of your IRS compliant Solo 401k Plan. Our Solo 401k Plan experts and tax and ERISA professionals are on site greatly reducing the set-up time and cost. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

Leader: IRA Financial Group is the markets leading provider of Solo 401(k) Plans. We have helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investments.

Value: We strive to offer our clients customized Solo 401(k) Plans at a fair and reasonable price. Whereas our competitors are forced to outsource much or all of their tax work and consultation, each client of the IRA Financial Group is assigned to one of our in-house retirement tax professionals allowing us to offer customized Solo 401(k) Plans for significantly less than our competitors.

We provide the following all for one low price:

  • Free tax consultation with our in-house tax and ERISA professionals
  • Adoption Agreement
  • Basic Plan Document
  • EGTRRA Amendment
  • Summary Plan Description
  • Trust Agreement
  • Appointment of Trustee
  • Beneficiary Designation
  • Loan Procedure
  • Loan Promissory Note
  • Free tax updates
  • Free tax and ERISA support
  • Satisfaction Guaranteed!

Integrity: We are guided by the rules of ethical conduct in all that we do. Our relationships with clients are built on trust, respect, and confidentiality.

Innovative: We anticipate the changing tax and financial needs of our clients and creatively adapt our Solo 401(k) Plan tax solutions to address them.

Results: We are committed to our clients’ satisfaction and strive to meet and exceed our clients’ expectations.

IRA Financial Group will take care of everything. The whole process can be handled by phone, email, fax, or mail. Our expert tax and ERISA professionals are on site greatly reducing the set-up time and cost. Most importantly, you will find that our fee for this service is significantly less than other companies that perform the same or similar services.

Please contact one of our 401(k) Experts at 800-472-0646 for more information.

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Aug 08

Solo 401(k) CPA Services for Real Estate Investors

IRA Financial Group is the only full service Solo 401(k) Plan facilitator that offers its clients the ability to consult with our in-house tax accountants and CPAs, in addition, to our tax professions. Our in-house CPAs are specially trained in the taxation of retirement accounts, which allows us to provide our clients with specialized tax advice and offer tax filing and reporting services relating to the use and taxation of 401(k) Plan funds to make investments. Because the Solo 401(k) Plan is governed by a complicated set of IRS and ERISA tax rules, it is crucial to work directly with specially trained tax professionals and CPAs.

Solo 401(k) CPA Services for Real Estate InvestorsThe Taxation of a Solo 401(k) Plan

The one-participant 401(k) plan is not a new type of 401(k) plan. It is a traditional 401(k) plan 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) plan. The Solo 401(k) Plan is a qualified retirement plan that is governed by Internal Revenue Code Section 401. A Solo 401(k) Plan is a tax-exempt qualified retirement plan. In other words, in general, a Solo 401(k) Plan is not subject to any tax earned on any passive income allocated to the Solo 401(k) Plan.

Annual Tax Reporting Requirement – IRS Form 5500-EZ

A Solo 401(k) plan is generally required to file an annual report on IRS Form 5500-EZ if it has $250,000 or more in assets at the end of the year. A one-participant plan with fewer assets may be exempt from the annual filing requirement.

In-House CPA Services

The IRA Financial Group has designed a specialized Solo 401(k) CPA service, which will offer clients the ability to consult with specialized Solo 401(k) Plan trained CPAs on a wide variety of tax & ERISA matters concerning the Solo 401(k) Plan. Below is a list of some of the services offered by our in-house CPAs:

  • Advising clients regarding Federal Income tax matters concerning the establishment, maintenance, and operation of a Solo 401(k) Plan
  • Advising clients regarding ERISA tax matters concerning the establishment, maintenance, and operation of a Solo 401(k) Plan
  • Advising clients regarding state income tax matters concerning the establishment, maintenance, and operation of a Solo 401(k) Plan
  • Assisting clients with the completion and filing of IRS Form 5500-EZ
  • Assisting clients with the completion and filing of any Federal Income tax Partnership returns in connection with the employer which adopted the Solo 401(k) Plan
  • Assisting clients the completion and filing of any state Income tax returns in connection with the employer which adopted the Solo 401(k) Plan
  • Advising clients on the IRS prohibited transaction rules as they pertain to federal and state tax matters concerning using a Solo 401(k) Plan to make investments
  • Advising clients regarding the Unrelated Business Taxable Income (UBTI or UBIT) rules concerning a Solo 401(k) Plan investment
  • Advising clients regarding the Unrelated Debt Finance Income (UDFI) tax rules concerning a Solo 401(k) Plan investment
  • Assisting clients the completion and filing of the IRS Form 990-T in connection with a Solo 401(k) Plan investment that generates UBTI and/or UDFI
  • Assisting clients with the day-to-day accounting and management of the Solo 401(k) plan investments (QuickBooks)
  • Solo 401(k) Plan annual asset valuation services
  • Advising on the federal and state asset & creditor protection rules relating to the use of a Solo 401(k) Plan

Specialized In-House CPA Service for Real Estate Investors

When it comes to engaging in a real estate transaction with a Solo 401(k) Plan there are a number of important IRS and tax rules that must be followed. For example, IRC Section 4975 prohibits an Plan owner to engage in a transaction that directly or indirectly benefits him/or her or any other “disqualified person”. A “disqualified person” is defined in IRC Section 4975 as the Plan owner and any of his or her lineal descendants, which include parents, children, spouse, daughter-in-laws, and son-in-laws. In addition, a “disqualified person” is not permitted to provide any services or receive any personal benefit from the Solo 401(k) Plan investment. Therefore, IRA Financial Group has specially designed a CPA tax service program for Solo 401(k) Plan investors. The specialized CPA service will offer special federal and state tax advice regarding real estate matters as well will cover federal and state tax reporting and filing obligations. Our specially designed Solo 401(k) Plan real estate CPA service will also offer clients that ability to work with our in-house CPAs to develop an internal accounting system that could keep track of all Solo 401(k) Plan related expenses and income in order to be in a position to properly value the Solo 401(k) Plan assets. The Solo 401(k) Plan real estate CPA service is designed to offer a Solo 401(k) Plan retirement investor with a more detailed accounting of the activities of the Solo 401(k) Plan and its investments.

The tax professionals and CPAs at the IRA Financial Group are committed to making sure your Solo 401(k) Plan solution remains in full IRS and ERISA compliance from establishment through investment.

For more information on IRA Financial Group’s in-house CPA services, please contact a Solo 401(k) Plan expert at 800-472-0646.

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Jun 12

Why Should You Use IRA Financial Group for Your Individual 401k Plan?

IRA Financial Group is one of the top Solo 401(k) plan facilitators in the country.  Here are just a few reasons why you should consider us for your self-employed retirement needs –

Excellence: Our in-house retirement tax professionals have worked at some of the largest law firms in the United States, including White & Case LLP and Dewey & LeBoeuf LLP. Their tax and ERISA experience is unmatched in the industry and is the reason we are considered the leading facilitator of true “Checkbook Control” Solo 401K Plan structures.

Why Should You Use IRA Financial Group for Your Individual 401k Plan?Work directly with our in-house retirement tax professionals to set-up an IRS compliant Solo 401K Plan. Our clients have direct access to our in-house retirement tax professionals to ensure that the Solo 401K Plan is customized to satisfy the client’s retirement and investment objectives. In fact, we encourage our clients to contact our in-house retirement tax professionals with any tax and ERISA questions concerning the structure or a proposed investment to ensure full IRS compliance.

Our Solo 401K experts will take care of the entire set-up of your IRS compliant Solo 401k Plan. Our Solo 401k Plan experts and tax and ERISA professionals are on site greatly reducing the set-up time and cost. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

Leader: IRA Financial Group is the markets leading provider of Solo 401(k) Plans. We have helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investments.

Value: We strive to offer our clients customized Solo 401(k) Plans at a fair and reasonable price. Whereas our competitors are forced to outsource much or all of their tax work and consultation, each client of the IRA Financial Group is assigned to one of our in-house retirement tax professionals allowing us to offer customized Solo 401(k) Plans for significantly less than our competitors.

We provide the following all for one low price:

  • Free tax consultation with our in-house tax and ERISA professionals
  • Adoption Agreement
  • Basic Plan Document
  • EGTRRA Amendment
  • Summary Plan Description
  • Trust Agreement
  • Appointment of Trustee
  • Beneficiary Designation
  • Loan Procedure
  • Loan Promissory Note
  • Free tax updates
  • Free tax and ERISA support
  • Satisfaction Guaranteed!

Integrity: We are guided by the rules of ethical conduct in all that we do. Our relationships with clients are built on trust, respect, and confidentiality.

Innovate: We anticipate the changing tax and financial needs of our clients and creatively adapt our Solo 401(k) Plan tax solutions to address them.

Results: We are committed to our clients’ satisfaction and strive to meet and exceed our clients’ expectations.

IRA Financial Group will take care of everything. The whole process can be handled by phone, email, fax, or mail. Our expert tax and ERISA professionals are on site greatly reducing the set-up time and cost. Most importantly, you will find that our fee for this service is significantly less than other companies that perform the same or similar services.

Please contact one of our IRA Experts at 800-472-0646 for more information.

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Jun 08

IRA Financial Group Individual 401k vs. Scottrade

The Solo 401K Plan, also known as the Individual 401K or Self Directed 401K Plan is an IRS approved plan that was designed specifically for the self-employed or small business owner with no employees other than the owners(s). Since the adoption of the 2002 Economic Growth and Tax Reconciliation Act, the Solo 401K Plan has become the most popular retirement plan for the self-employed.

When it comes to deciding what type of Solo 401K plan is best for you and your business, it is important to look at all the options the plan provides to make sure it will satisfy your retirement planning, tax, and investment goals.

Most banks and financial institutions, such as Scottrade offer Solo 401K Plans. The Solo 401K Plans are typically quite restrictive and only permit the plan participant to make limited investments without benefiting from most of the available IRS approved options such as the tax-free loan and Roth contributions. However, if you do not want to be forced to invest all your hard earn retirement savings in the stock market, than the Scottrade Solo 401K Plans may end up not being very attractive.  In addition, the Scottrade Solo 401K Plans will not offer a loan feature or allow you to make Roth Type contributions.

IRA Financial Group’s Solo 401K plan is unique and so popular because it is designed explicitly for small, owner only business.

Unlike Scottrade’s Solo 401K Plan, by adopting IRA Financial Group’s Solo 401K Plan, you can serve as trustee of the plan and make traditional investments as well as non-traditional investments such as real estate tax-free and without custodian consent.

IRA Financial Group Individual 401k vs. Scottrade

Have an investment you want to make with your retirement funds, like real estate, but Scottrade won’t let you do it even though it ‘s approved by the IRS?  Then IRA Financial Group’s Solo 401K Plan is your solution.

Make high Tax-Free Contributions: Similar to the Scottrade Solo 401K Plan, with IRA Financial Group’s Solo 401K Plan you can to make tax-deductible annual contributions up to $54,000 annually with an additional $6,000 catch up contribution for those over age 50 for 2017.

Tax-Free Loan:  Fidelity Solo 401K Plan offers no loan feature, while IRA Financial Group’s Solo 401K Plan allows plan participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose. The loan has to be paid back over a five-year period at least quarterly at a minimum Prime interest rate (you have the option of selecting a higher interest rate)

Checkbook Control: The most significant advantage of the IRA Financial Group Solo 401k Plan versus the Scottrade Solo 401K Plan is that it offers you checkbook control over your retirement funds. With the Scottrade Solo 401K Plan, the plan participant is relegated to making traditional investments such as stocks and or mutual funds.  In addition, the Solo 401KPlan account is required to be opened at Scottrade.  With IRA Financial Group’s Solo 401K 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 401K Plan, the plan participant can make almost any traditional as well as non-traditional investments, such as real estate, precious metals, tax liens, third-party lending, notes, stock, private business, and much more. With IRA financial Group’s Solo 401K Plan, the Plan participant has the freedom to make the investments he or she wants while at the same time to open the 401K account at any local bank or credit union. With IRA Financial Group’s Solo 401K Plan, you can serve as the trustee of the plan giving you checkbook control over your retirement funds. In contrast to Scottrade’s Solo 401K Plan, which restricts your investment opportunities to stocks and mutual funds, with IRA Financial Group’s Solo 401K Plan, making a traditional as well as non-traditional investment such as real estate is as simple as writing a check.

After-Tax Contributions: Scottrade’s Solo 401K Plan does not allow for Roth or after-tax contributions. IRA Financial Group’s Solo 401K Plan contains a built in Roth sub-account which can be contributed to without any income restrictions.  In addition, Scottrade’s Solo 401K Plan does not allow for in-plan Roth conversions or rollovers.  Whereas, IRA Financial Group’s Solo 401K Plan allows for in-plan Roth conversions. However, the Solo 401K Plan participant must pay income tax on the amount converted.

Easy Administration:  Like Scottrade’s Solo 401K Plan, IRA Financial Group’s Solo 401K Plan is easy to operate. There is generally no annual filing requirement unless your solo 401K Plan exceeds $250,000 in assets, in which case you will need to file a short information return with the IRS (Form 5500-EZ). 
Unlike Scottrade, however, the tax attorneys at the IRA Financial Group will assist you in completing this form is required

No Tax on Real Estate Financing:  Since the Scottrade Solo 401K Plan does allow for real estate investments, you would not be able to benefit from the ability to use nonrecourse financing tax-free when making real estate investments with Solo 401K retirement funds. IRA Financial Group’s Solo 401K Plan will allow one to use nonrecourse leverage tax-free when making real estate investments with plan assets.

IRA Financial Group will take care of setting up your entire Solo 401k Plan. The whole process can be handled by phone, email, fax, or mail and typically takes between 2-7 days to complete, the timing largely depending on the state of formation and the custodian holding your retirement funds. Our 401k experts and tax and ERISA attorneys are on site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a tax attorney to help with the establishment of the Solo 401k Plan. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

To learn more about the advantages of choosing the IRA Financial Group’s Solo 401K Plan over the Scottrade Solo 401K Plan, please contact a tax professional at 800-472-0646 or visit www.irafinancialgroup.com.

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Apr 17

Why Choose an IRA Financial Group Solo 401k Vs Charles Schwab

The Solo 401K Plan, also known as the Individual 401K or Self Directed 401K Plan is an IRS approved plan that was designed specifically for the self-employed or small business owner with no employees other than the owners(s). Since the adoption of the 2002 Economic Growth and Tax Reconciliation Act, the Solo 401K Plan has become the most popular retirement plan for the self-employed.

When it comes to deciding what type of Solo 401K plan is best for you and your business, it is important to look at all the options the plan provides to make sure it will satisfy your retirement planning, tax, and investment goals.

IRA Financial Group Vs. Vanguard Solo 401k PlanMost banks and financial institutions, such as Charles Schwab offer Solo 401K Plans. The Solo 401K Plans are typically quite restrictive and only permit the plan participant to make limited investments without benefiting from most of the available IRS approved options such as the tax-free loan and Roth contributions. However, if you do not want to be forced to invest all your hard earn retirement savings in the stock market, than the Charles Schwab Solo 401K Plans may end up not being very attractive. In addition, the Charles Schwab Solo 401K Plans will not offer a loan feature or allow you to make Roth Type contributions.

IRA Financial Group’s Solo 401K plan is unique and so popular because it is designed explicitly for small, owner only business.

Unlike Charles Schwab’s Solo 401K Plan, by adopting IRA Financial Group’s Solo 401K Plan, you can serve as trustee of the plan and make traditional investments as well as non-traditional investments such as real estate tax-free and without custodian consent.

Have an investment you want to make with your retirement funds, like real estate, but Charles Schwab won’t let you do it even though it ‘s approved by the IRS? Then IRA Financial Group’s Solo 401K Plan is your solution.

Make high Tax-Free Contributions: Similar to the Charles Schwab Solo 401K Plan, with IRA Financial Group’s Solo 401K Plan you can to make tax-deductible annual contributions up to $54,000 annually with an additional $6,000 catch up contribution for those over age 50 for 2017.

Tax-Free Loan: Charles Schwab Solo 401K Plan offers no loan feature, while IRA Financial Group’s Solo 401K Plan allows plan participants to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose. The loan has to be paid back over a five-year period at least quarterly at a minimum Prime interest rate (you have the option of selecting a higher interest rate)

Checkbook Control: The most significant advantage of the IRA Financial Group Solo 401k Plan versus the Charles Schwab Solo 401K Plan is that it offers you checkbook control over your retirement funds. With the Charles Schwab Solo 401K Plan, the plan participant is relegated to making traditional investments such as stocks and or mutual funds. In addition, the Solo 401KPlan account is required to be opened at Charles Schwab. With IRA Financial Group’s Solo 401K 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 401K Plan, the plan participant can make almost any traditional as well as non-traditional investments, such as real estate, precious metals, tax liens, third-party lending, notes, stock, private business, and much more. With IRA financial Group’s Solo 401K Plan, the Plan participant has the freedom to make the investments he or she wants while at the same time to open the 401K account at any local bank or credit union. With IRA Financial Group’s Solo 401K Plan, you can serve as the trustee of the plan giving you checkbook control over your retirement funds. In contrast to Charles Schwab’s Solo 401K Plan, which restricts your investment opportunities to stocks and mutual funds, with IRA Financial Group’s Solo 401K Plan, making a traditional as well as non-traditional investment such as real estate is as simple as writing a check.

After-Tax Contributions: Charles Schwab’s Solo 401K Plan does not allow for Roth or after-tax contributions. IRA Financial Group’s Solo 401K Plan contains a built in Roth sub-account which can be contributed to without any income restrictions. In addition, Charles Schwab’s Solo 401K Plan does not allow for in-plan Roth conversions or rollovers. Whereas, IRA Financial Group’s Solo 401K Plan allows for in-plan Roth conversions. However, the Solo 401K Plan participant must pay income tax on the amount converted.

Easy Administration: Like Charles Schwab’s Solo 401K Plan, IRA Financial Group’s Solo 401K Plan is easy to operate. There is generally no annual filing requirement unless your solo 401K Plan exceeds $250,000 in assets, in which case you will need to file a short information return with the IRS (Form 5500-EZ). 
Unlike Charles Schwab, however, the tax attorneys at the IRA Financial Group will assist you in completing this form is required

No Tax on Real Estate Financing: Since the Charles Schwab Solo 401K Plan does allow for real estate investments, you would not be able to benefit from the ability to use nonrecourse financing tax-free when making real estate investments with Solo 401K retirement funds. IRA Financial Group’s Solo 401K Plan will allow one to use nonrecourse leverage tax-free when making real estate investments with plan assets.

IRA Financial Group will take care of setting up your entire Solo 401k Plan. The whole process can be handled by phone, email, fax, or mail and typically takes between 2-7 days to complete, the timing largely depending on the state of formation and the custodian holding your retirement funds. Our 401k experts and tax and ERISA attorneys are on site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a tax attorney to help with the establishment of the Solo 401k Plan. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

To learn more about the advantages of choosing the IRA Financial Group’s Solo 401K Plan over the Charles Schwab Solo 401K Plan, please contact a tax professional at 800-472-0646 or visit www.irafinancialgroup.com.

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Apr 11

New Podcast – Impact of Having a Solo 401(k) Plan on Your Personal Tax Return

IRA Financial Group’s Adam Bergman discusses the tax implications and filing and reporting requirements when you have a Solo 401(k) Plan.

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Click Here to Listen

 

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Mar 23

How to Fill Out IRS Form 5500-EZ with a Solo 401k

In general, the solo 401(k) plan is easy to operate. There is generally no annual filing requirement unless the fair market value of your solo 401(k) plan asset exceeds $250,000, as of December 31 of the previous year. If your solo 401(k) plan assets exceed $250,000 as of 12/31 of the previous year, you will need to file a short information return with the IRS (Form 5500-EZ). In such a case, the Solo 401(k) Plan participant will need to file a short information return with the IRS (Form 5500-EZ). The IRS Form 5500-EZ is due on July 31 and is filed in paper form.

Please click here to download a PDF with the most updated instructions for the 2016 tax year. It also has more details not listed here at the end of the document, including Forms 5500, 5500-SF, and 5500-EZ Codes for Principal Business Activity.

Need the 5500-EZ form?

Please click here to download the 5500-EZ form from the IRS website.

Helpful instructions are listed below…

IRS FORM 5500-EZ

HOW TO REPORT THE FAIR MARKET VALUE OF ASSETS HELD BY YOUR SOLO 401K PLAN TO THE IRS

The Internal Revenue Service (“IRS”) Form 5500-EZ is an annual information return that is required to be filed by every “One-Participant Plan” (owners and their spouses), also known as a Solo 401(k) Plan, with plan asset value in excess of $250,000 as of December 31 of the previous tax year. The purpose of filing and reporting the fair market value (“FMV”) of your solo 401(k) plan’s assets is to inform the IRS of assets over $250,000.00 annually held in a Solo 401(k) Plan. You must file the Form 5500-EZ if a plan meets the requirements alone or combined with any other qualified retirement plan owned greater than 80% by the business owner or a related party (one controlled group) exceeding $250,000.00.

You do not have to file the form 5500-EZ for a plan year for a one-participant plan if the total of the plan’s assets and the assets of all other one-participant plans maintained by the employer at the end of the plan year does not exceed $250,000.00, unless the current year is the final plan year of the plan.

FILING TIPS:

  • The Form 5500-EZ is due every July 31st of the next plan year. Ex: for a plan that was established in or before 2016, the IRS Form 5500-EZ is due by July 31 st , 2017. If the filling date falls on a Saturday, Sunday, or legal holiday it may be filed on the next day that is not.
  • The Form 5500-EZ must be filed as a hard copy and sent directly to the IRS at the following address:

Department of the Treasury

Internal Revenue Service

Ogden, UT 84201-0020

  • To file the Form 5500-EZ using a private delivery service, you must use the approved IRS Designated providers (PDS) as follows:
  • DHL Express (DHL): Same Day Service. Federal Express (FedEx): Priority Overnight, Standard Overnight, FedEx 2 Day, FedEx International Priority and FedEx International First. United Parcel Service (UPS): UPS Next Day Air, UPS Net Day Air Saver, UPS 2nd Day Air A.M., UPS Worldwide Express Plus, and UPS Worldwide Express.

The Private delivery services should use the following address:

Internal Revenue Service

1973 Rulon White Blvd.

Ogden, UT 84404

  • The Form 5500-EZ cannot be e-filed electronically.
  • The Plan Administrator or employer (owner) must use the official printed paper Form 5500-EZ obtained from the IRS, and use blue or black ink for a wet signature. NO ELECTRONIC SIGNATURE ALLOWED. Print, sign and date before mailing.
  • Do not use a felt tip pen or other inks that bleed through, the other side should be blank.
  • Do not use arrows or make notes on the Form 5500-EZ and only enter information in the specific fields provided. Abbreviate if necessary.
  • Do not include schedules or attachments. However, you should retain them for your records.

PENALTIES:

The Internal Revenue Code imposes a penalty of $25 a day (up to $15,000).

COMPLETING THE IRS FORM 5500-EZ

It is important to work with a tax professional when completing the IRS Form 5500-EZ. When working with the IRA Financial Group, our tax professionals and CPAs will help you complete and file the IRS Form 5500-EZ if your plan has assets valued at $250,000 or above as of December 31 of the previous year.

PART I – Annual Return identification Information:

Enter the beginning date of the plan and then the ending date.

A) Check (1) for the first return filed for the plan. If this is not the first year filing then leave this unchecked.

B) Typically, do not check this box unless filed Form 5558 for an extension of time.

C) Typically, do not check this box unless this plan is maintained outside the United States.

PART II – Basic Plan Information:

1a) Enter the name of the plan as it appears on the EIN letter from the IRS: ABC CONSULTING 401K TRUST.

1b) Enter the numbers 001 for this year and every year’s future fillings use the same number. Note – if this plan will be amending an existing solo 401(k) Plan, you will need to include the appropriate 3 digit code (i.e. 002), which can be found in the plan Adoption Agreement.

1c) The date the plan became effective is found in Section One of your Adoption Agreement.

2a) Enter the name of the Adopting Employer:

ABC Consulting LLC

dba or c/o if applicable

1234 Ginger Street
(P.O. Box ONLY if USPS does not deliver).
Family, FL 55555

2b) Enter the Adopting Employer EIN XX-XXXXXXX no SS#. If plan is under a Sole Proprietor, YOU MUST OBTAIN AN EIN FROM THE IRS by completing the online application:

Apply for an EIN

Alternatively, you can acquire an EIN by preparing and faxing the Form SS-4 to the IRS at I-800-829-3676 then call 1-800-829-4933 to receive your EIN by phone. The EIN is issued immediately once the application information is validated.

2c) Enter the Adopting Employer telephone number: 888-888-8888.

2d) Enter the 6 digit applicable code XXXXXX that best describes the nature of the plan sponsors business from the list of principal business activity codes included at the end of these instructions.

3a) Enter the Plan Administrator information OPTIONAL. If preparer is the same as above, enter the same information.

3b) Enter and repeat the same EIN XX-XXXXXXX number as listed in 2b.

3c) Enter the Plan Administrator telephone number: 888-888-8888.

4a) Enter the name of the Trust: ABC CONSULTING 401K TRUST.

4b) Enter the EIN number as it appears on the EIN letter from the IRS: XX-XXXXXXX.

5a), 5b) and 5c) is not required if no changes were made to the plan.

6a) Enter the total number of participants at the beginning of the year. If solo 401K plan: Ex: 1 participant. Note – if the plan will include the spouse of a participant or a second business owner, then the appropriate number would need to be included (i.e. 2).

6b) Enter the total number of participants at the end of the plan year. If solo 401K plan: Ex: 1 participant. Note – if the plan will include the spouse of a participant or a second business owner, then the appropriate number would need to be included (i.e. 2).

PART III – Financial Information:

7a(1) Enter the “Total Plan Assets” or the same amount in 7a(2) from last year; if filed Form 5500-EZ previously. Otherwise, this figure includes “Total Plan Assets” as: rollovers, unrealized gains and losses such as appreciation/depreciation in assets. It also includes specific assets held by the plan at any time during the plan year (for example, partnership/joint venture interests, employer real property, real estate (other than employer real property), employer securities, loans (participants and non-participant loans), and tangible personal property). Please do not include contributions.

7a(2) Enter end of year “Total Plan Assets” as listed above. Please do not include contributions. NOTE: “Total Plan Assets” should include the amount of any liabilities, including , for example, mortgages.

7b(1) Enter “Total plan liabilities” to include but are not limited to benefit claims payable, operating payables, acquisition indebtedness (i.e. nonrecourse loan) and other liabilities. Do not include the value of future distributions what will be made to participants.

7b(2) Enter end of year “Total plan liabilities” as listed above.

7c(1) Enter “Net plan assets” the sum of by subtracting 7b(1) from 7a(1).

7c(2) Enter end of the year “Net plan assets” sum of by subtracting 7b(2) from 7a (2).

8a) and 8b) Enter total cash contributions received and/or receivable from employer and participants during the plan year.

8c) Enter all contributions including rollovers received from other plans valued on the date of contribution.

PART IV – Plan Characteristics:

9) Enter the applicable two-character feature Codes. In most cased, the following codes would be used: 2E, 2J, 3B, 3D. Note, if your plan assets are held in a brokerage account, then you would want to include 2R.

PART V – Compliance and Funding Questions:

10) Check YES if any of the participants entered into a loan from the plan and the amount or NO if not applicable.

11) Check NO.

11a) Enter N/A for amount.

12) Check NO.

DO NOT complete any information for 13) , 14) and 15). They are optional and are not required in this year’s filing.

IRA Financial Group offers all of its Solo 401(k) Plan clients the service of completing the IRS Form 5500-EZ for no additional fee. We want to make sure our solo 401(k) Plan clients that are required to file an IRS Form 5500-EZ are getting the necessary support they need to make sure the form is completed properly. All solo 401(k) plan clients required to file the IRS Form 5500-EZ will work our in-house CPAs to help prepare and file the IRS Form 5500-EZ.

For additional instructions on completing the IRS Form please contact the IRS Help Line at 1-877-829-5500 or one of our Solo 401(k) Experts @ 800.472.0646.

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Jul 15

What Makes IRA Financial Group’s Solo 401k Better?

The IRS approved Solo 401(k) Plan has been used by hundreds of thousands of small businesses for over 30 years. However, the scope of options available to Solo 401(k) Plan participants is determined based on the plan documents. To this end, most financial institutions that offer Solo 401(k) Plan restrict the Plan participant to invest plan assets solely in their financial products and do not permit plan loans. Even though the IRS allows for 401(k) plans to invest in nontraditional investments, such as real estate, and allows for Plan loans (IRC 72(p)), those options are typically not offered by financial institutions because it would cut into the commissions they can earn from your plan investments. For example, if you use your 401(k) plan assets to purchase real estate or do a loan, you will have less money to buy their financial products.

The “True” Solo 401(k) Plan offered by the IRA Financial Group offers the 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 without requiring custodian consent tax-free! In addition, a Solo 401(k) Plan will allow you to make high contribution limits (up to $59,000) as well as borrow up to $50,000 for any purpose. Also, you will be able to open up the Solo 401(k) Qualified Plan Trust account at any local bank or credit union.

The True Solo 401(k) Plan Advantages

The IRA Financial Group’s “True” Solo 401(k) plan is unique and so popular because it is designed explicitly for small, owner only business.  There are many features of our “True” Solo 401(k) plan that make it so appealing and popular among self-employed business owners.

High 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. That amount can be made in pre-tax or after-tax (Roth). On the 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 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.

Calculate Your Solo 401k Plan Maximum Contribution Limit Please click here to calculate your Solo 401(k) Plan Maximum Contribution Limit.

Loan Feature: With the “True” Solo 401k Plan, a plan participant is eligible to borrow up to $50,000 or 50% of their account value (whichever is less) for any purpose, including paying credit card bills, mortgage payments, personal or business investments, a car, vacation, or anything else. The loan has to be paid back over a five year period at least quarterly at a minimum prime interest rate (you have the option of selecting a higher interest rate)

“Checkbook Control”: The most noteworthy benefit of the “True” Solo 401k Plan is that it does not require the participant to hire a bank or trust company to serve as trustee. This flexibility allows the plan participant (you) to serve in the trustee role. This means that all assets of the 401(k) trust are under the sole authority of the Solo 401k participant.  A “True” Solo 401(k) plan allows you to eliminate the expense and delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself. Making a Solo 401K Plan investment is as simple as writing a check.

Flexible Contribution Options: With the “True” Solo 401(k) Plan, contributions are completely discretionary. You always have the option to try to contribute as much as legally possible, but you always have the option of reducing or even suspending plan contributions if necessary.

Roth Type Contributions: The “True” Solo 401(k) plan contains a built in Roth sub-account which can be contributed to without any income restrictions.

Offset the Cost of Your Plan with a Tax Deduction: By paying for your Solo 401(k) with business funds, you would be eligible to claim a deduction for the cost of the plan, including annual maintenance fees. The deduction for the cost associated with the Solo 401(k) Plan and ongoing maintenance will help reduce your business’s income tax liability, which will in-turn offset the cost of adopting a self-directed Solo 401(k) Plan. The retirement tax professionals at the IRA Financial Group will help you take advantage of the available business tax deduction for adopting a Solo 401(k) Plan.

Cost Effective Administration: The “Tue” Solo 401(k) Plan is easy to operate and effortless to administer. 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).

Roth Conversion: The “True” Solo 401(k) Plan allows for the conversion of pre-tax 401(k) funds to a Roth. However, the 401(k) Plan participant must pay income tax on the amount converted.

 

Financial Institution Solo 401(k) Plan

IRA Financial Group “True” Solo 401(k) Plan

High Contribution Limits (up to $53,000 if under the age of 50 and $59,000 if Participant is over 50 1/2)

Yes

Yes

Loan Feature (borrow up to $50,000 tax-free)

No

Yes

Traditional Investment Options (i.e. stocks and mutual funds)

Yes

Yes

Nontraditional Investment options (i.e. real estate, precious metals, tax liens, etc.)

No

Yes

Unlimited Investment Options

No

Yes

“Checkbook Control”

No

Yes

Roth sub-account

Yes

Yes

Roth conversion feature

No

Yes

Direct Access to your Retirement Funds

No

Yes

Serve as trustee of your Solo 401(k) Plan

Yes

Yes

Unlimited bankruptcy protection

Yes

Yes

Please contact one of our Solo 401(k) Experts at 800-472-0646 for more information.

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