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
A solo(k) can receive over $50K annually in new contributions and is an optimal savings tool for self-employed persons.2. Self-Directed and Self-Trustee
Directed IRA solo(k)s are self-directed and you as the business owner serve as trustee and will have checkbook control of your own solo(k) bank checking account.3. Must be Self-Employed with No Employees
In order to qualify for a solo(k) you must be self-employed with no other full-time employees. 4. Roth & Traditional Accounts
A solo 401(k) can have both Roth and Traditional accounts and the business owner’s spouse may also have accounts if they also work in the business.Fee Schedule Solo 401k – Custodial
Fee Schedule Solo 401k – Annual Compliance Plan
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Does the client already have a Solo 401(k) but it’s either out of date or it is a plan captive with a broker/dealer and you can’t self-direct?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.
Solo 401(k) Application
Solo 401(k) FAQ Sheet
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….
Account Types: roth ira, traditional ira, inherited ira, sep ira, hsa, cesa, checkbook IRA/LLC, solo401(k), backdoor roth
Learn: learn, podcast, articles, videos, quickstart guide, resource directory
Investment Types: real estate, checkbook IRA/LLC, private company, precious metals, cryptocurrency
Forms: open account, new account, fund account, invest account, maintain account, fee schedule
Fine print: site terms, privacy policy, important tax notice
Stay in touch: newsletter, twitter, facebook, linkedin, youtube
Directed IRA is a Tradename of Directed Trust Company. Directed Trust Company performs the duties of a directed custodian, and as such does not provide due diligence to third parties on prospective investments, platforms, sponsors or service providers and does not sell investments or provide investment, legal, or tax advice.
8 am - 5 pm Monday to Friday
Arizona MST: 602.899.9396
Click here to schedule a new account phone appointment
3033 N. Central Ave,
Suite 400
Phoenix, AZ 85012
P: 602.899.9396
F: 602.899.9641
