What is a Solo 401k?
The Solo 401k is an exciting new retirement plan option for the self employed created by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Businesses employing only the owner or owner and spouse can now benefit from extremely beneficial retirement planning and tax saving options via a Solo 401k. Businesses qualifying for this favorable treatment in the tax code include Sole Proprietors, C and S Corporations, Partnerships, and LLCs.
A Solo 401K is a retirement plan for business owners who do not employ any staff. To be eligible for the Solo 401K plan, you must be the sole owner of the business, although a spouse can also be included in the plan. You must also not be expecting to employ any other staff in your business in the future. You can contribute up to 40,000 US dollars (USD) a year to the Solo 401K plan. If you are aged 50 or over, you are also allowed a 2,000 USD catch-up contribution. Once you have reached your 40,000 USD yearly contributions, no further contributions are permitted except for the 2,000 USD catch-up allowance. There are many benefits to the Solo 401K retirement plan. You may be eligible to take out a loan. If you have 100,000 USD already in the plan, you can apply for a 50,000 USD loan. You are also permitted to deduct your Solo 401K contributions from your taxes, and the Solo 401K investment will build on a tax-deferrable basis. Depending on your yearly income, the tax savings when using a
A 401k is an employer plan that is basically a legal tax shelter. It is created and governed by section 401(k) of the Internal Revenue Code. Contributions are made, often tax deductible, into the 401k account by the employee, and the employer will sometimes make contributions into their employees’ accounts as well. Investment returns and asset growth happen without taxation directly on income or gains. This allows the account to grow much more rapidly, usually in exchange for taxation as you later distribute funds to yourself for personal use. A Solo 401k is one designed specifically for self employed individuals who have no full time employees other than themselves and/or their spouse. Our Solo 401k offers the most flexibility permitted by law. It allows you to directly control your investments in an unrestricted platform. As the systemic flaws of the stock market become more undeniable as each day passes, investors are flocking to “alternative assets” for better wealth preservation a
