Solo 401k plans: The mother cap with tax deductions

What is a Solo 401k Plan?

Only 401,000 plans are pension plans that contain discretionary employee and employer contributions. These plans evolved in 2001 from the Economic Growth and Tax Exemption Act (EGTRRA). The law made it possible to change the legislation on traditional 401k plans.

The changes allowed small businesses to enjoy the benefits of making income deferrals for 401k plans in addition to employer contributions without exceeding the tax deduction thresholds that previously accompanied regular 401k plans. Some estimate that 19 million people might benefit from these plans.

Who can have a Solo 401k plan?

You can do this if you are self-employed without ordinary law employees. Qualified self-employed people include individuals, partnerships, S-Corps, C-Corps, LLC and small family businesses. You can also have a Solo 401k plan if you have a part-time job in addition to your full-time position. You cannot have full-time permanent employees other than a spouse and, in some cases, your children. However, if your plan is configured properly, you may have part-time or occasional employees as long as they do not work more than 1000 hours for a period of twelve months.

Why do you need a Solo 401k plan?

Just 401k plan provides several options including:

1. You can defer tax of up to $ 17,500 a year as employee contributions

2. You can deduct up to 25% of your compensation (net income) up to $ 52,000 as an employer contribution.

3. You can withdraw an additional $ 5,500 over the $ 52,000 limit if you are 50 years or older.

4. You can get a tax-free pension with Roth Solo 401k contributions.

5. Your Solo 401k account is protected against bankruptcy creditors.

6. You can consolidate your traditional IRA, 403 (b) or corporate 401k as a conversion to Solo 401k. However, Roth IRAs cannot be transferred to the Solo 401k.

7. You can borrow up to 50% of your total Solo 401k account balance up to $ 50,000.

Where can you invest

Only 401,000 plans have multiple investment options. Some of the investment options include:

A. Stocks, bonds, mutual funds

B. Real estate

C. Private locations

D. Other companies such as LLC

E. Interests in Oil and Gas

F. Stock options

G. Mortgage and Investment Loans

H. Gold and silver coins

I. Life insurance & annuities

When should a plan be set?

A Solo 401k plan should be started early in the year to use your earnings as the basis for your contributions. However, you can start a plan as late as December 31 and still take advantage of your taxes. You just can’t wait until the day before you file your taxes. When you’re ready, go to Only 401k to get started. To investigate further, go to: IRS reference to Solo 401k plans and Wikipedia reference for Solo 401k plans.

The reasons for starting a Solo 401k plan

.. Because you yourself want to direct the plan’s operations.

… Because you want Checkbook control over your investments.

… Because you want to confidently discard your asset decisions.

.. Because you yourself want custody of your assets.

Where To Get The Best Self-Controlled Checkbook Control Solo 401k Plan

Go to Solo-k Retirement Group: – Solo 401k Authority