Our office will be closed in observance of Martin Luther King Jr. Day on January 18th, 2021.
Solo 401(k)
Self-Direct Your IRA or Solo 401(k). Invest in What You Know.
Take Control of Your Retirement™.
4 Key Points to Consider
When Using a Solo 401(k)
1. Over $50K In Annual Contributions

2. Self-Directed and Self-Trustee

3. Must be Self-Employed with No Employees

4. Roth & Traditional Accounts

Do You Qualify For a Solo 401k?
Solo 401(k) Account: (Can be both Roth and Traditional or Both) Opening Solo 401(k) Next Steps: The Solo 401(k) is an Employee Benefit Plan that is exclusively for business owners that have no full-time employees besides themselves and a spouse. The Plan is adopted by a company, not an individual, that has earned ordinary income from the sale of goods or services.
$995 – Full service, attorney consult, plan documents and plan binder.
$495 – Plan docs, plan binder. No attorney consult.
Does the client already have a Solo 401(k) but it’s either out of date or it is a plan captive with a broker/dealer and you can’t self-direct? Restatement fee is $495
Opening Solo 401(k) Next Steps:
The Application is for plan set-up with Kyler Kohler Ostermiller & Sorensen, LLP (“KKOS”) who is a separate law firm and who has an IRS pre-approved Solo 401(k) that can be self-directed. You can use another law firm or plan provider of your choice but we have coordinated with KKOS for a streamlined service.
What Account Type is Best?
Please use the table and resources below to help compare
between a Solo 401(k) or a Self-Directed IRA
SOLO 401(k) |
SELF-DIRECTED IRA |
|
---|---|---|
Qualification |
Must be self-employed with no Full-Time Employees (besides yourself and a spouse). |
Self-Employment not required – must have earned income to contribute. |
Contribution Limits |
Max Annual Contribution = $57,000 (2020) and $58,000 (2021) |
Max Annual Contribution = $6,000 ($7,000 if over 50). |
Custodian Requirement |
You can be the Trustee and Administrator – No Custodian required but one may be named |
You MUST have a 3rd Party Custodian. |
Rollover Limitations |
Can rollover most retirement accounts except Roth IRA and 401k with a current employer. |
Can rollover existing retirement accounts. |
Loans |
Can borrow up to $50,000.00 from the 401(k) it is called a Participant Loan**. |
Cannot borrow from the IRA. |
UDFI Tax |
Leveraged Real Estate is NOT subject to UDFI. |
Leveraged Real Estate IS subject to UDFI Tax. |
Consequence of Prohibited Transaction |
15% excise tax if prohibited transaction occurs. |
Entire IRA is distributed if Prohibited Transaction occurs. |
Annual Maintenance Options
Choose the pricing plan
that best fits your personal situation
ANNUAL COMPLIANCE PLAN |
FULL SERVICE CUSTODIAL |
|
---|---|---|
Trustee/Plan Administrator |
Client is Trustee and Plan Administrator. |
Client is Trustee and Plan Administrator. |
Custodian |
No Custodian is named. |
Directed Trust Company named as Custodian. |
Bank Account Option |
Client goes to a bank of their choice to set-up a Trust Checking Account. |
Transactions will be made through an account held with Directed Trust Company. |
Checkbook Control |
Client has immediate checkbook control through their Trust Checking Account. |
Client needs 401k/LLC to obtain checkbook control. |
Record Keeping Responsibilities |
Client is responsible for all record-keeping and IRS filings required of the plan (ie. 5500 EZ or 1099-R**) |
Directed Trust Company handles all recordkeeping and IRS filings required of the plan. |
DTC FEE |
$150.00 Annually |
$350.00 for the 1st account, $250.00 for each additional account under the plan. |
VIDEOS AND ARTICLES ON SOLO 401(K) ACCOUNTS:
Definitions, Deadlines
and Funding Options
5500 EZ |
The administrator of the plan is required to file form 5500 EZ with the IRS if their Solo 401(k) plan has a combined value of assets over $250,000. For plans on a calendar year, the deadline for this filing is July 31st. |
1099-R |
Issued anytime money leaves a retirement plan (account) or if a Roth Conversion occurs. The deadline for this filing is January 31st. |
Participation |
Loan that allows account holders to take loan up to $50,000.00 or 50% of available plan balance. Interest Rate is Prime + 2%. The loan must be paid within 5 years and payments must be made at least quarterly. |
New Solo 401(k) Set-Up Deadline |
The Solo 401(k) Plan must be established by the Adopting Entity’s Tax Deadline. |
Employee Contribution Reporting Deadline |
You must report your Employee Contributions via W-2, which is due January 31st, but you have until the company’s tax return is filed to make the contributions. |
Constribution Deadline for Sole Prop, Single-Member LLC, or C-Corp |
April 15th (Can be extended by filing an extension) |
Constribution Deadline for S-Corp or Partnership LLC |
March 15th (Can be extended by filing an extension) |
FUNDING VIA CONTRIBUTIONS OR ROLLOVERS

401(K)/LLC

Articles On How To
Self-Direct Your Solo 401(k)

2020 Solo 401(k) Contribution Deadlines: Rules, Steps, and Strategies
As 2020 comes to an end, it is critical that Solo 401(k) owners understand when and how to make their 2020 contributions…..
Self-Directed IRA Versus Solo 401(k)
Many self-directed investors have the option of choosing between a self-directed IRA or a self-directed solo 401k….


Solo K Form 5500 Tax Filing and Five-Point Compliance Checklist
Solo 401(k)s have become a popular retirement plan option for self-employed persons….