Office equipment for Solo 401k use
Can I purchase a fax machine/scanner using my Solo 401k bank account? This will be used exclusively for the properties that I will purchase using the Solo 401k. It will not be used for any other personal purposes. Answer: We strongly recommend against doing so. While your intention may be to use this scanner/copier/printer/fax machine exclusively for the Solo 401k, […]
Accredited investor
I’m considering investing my Solo 401k into an investment that only allows accredited investors. How does the Solo 401k qualify to be accredited? Answer: In order for a Solo 401k to qualify as an accredited investor, the 401k owner must qualify: 1. Annual income of over $200,000 single, or $300,000 married, in each of the past […]
Depreciation
Can I claim depreciation expense on a property owned by my 401k? Answer: No. You could if there was taxable income, but because rental income from the property owned by your 401k is sheltered from taxes, there is nothing to deduct it against. It also does not affect your personal income tax.
Required minimum distributions
Required Minimum Distributions (RMDs) are the minimum amounts that must be withdrawn from your retirement accounts each year, once you reach a certain age. You are responsible for taking your RMDs, withholding the taxes from your RMDs, and reporting your RMDs These amounts will be included in your taxable income, except for parts, if any, […]
Transfer an annuity into my Solo 401k
How do I transfer my IRA annuity into my Solo 401k? Answer: An annuity is simply an investment of an IRA. IRS rules allow you to transfer any IRA (except Roth) into your new Solo 401k plan. In order to do so, you will need to contact the company holding your annuity and sell or liquidate […]
A separate bank account for each participant
Should there be a separate bank account for each participant? Answer: If you have more than one participant in your retirement plan, each participant’s funds must be accounted for separately. The easiest way to accomplish this is by setting up separate account for each participant for each type of monies (elective deferrals, profit sharing contributions, […]
Filing Form 5500-EZ if the value goes down
If I file Form 5500-EZ now, does that obligate me to file subsequent 5500-EZ forms for the following years even if the total plan assets are below 250k? Answer: No. Form 5500-EZ is required only if the total value of the 401k plan is $250,000 or above by the end of year. Filing the 5500-EZ […]
Can profit sharing contributions be made to my Solo 401k throughout the year?
Can profit sharing contributions to my Solo 401k be made throughout the year, or do I have to wait until the end of the year to make them? Answer: Profit sharing contributions can be made throughout the year. However, note that the profit sharing contributions are limited to a percentage of your compensation (25% for […]
Solo 401k account statement
We are applying for a new mortgage and the lender would like to see a quarterly statement for our retirement accounts. I spent some time yesterday and prepared a “snapshot” by generating a report from Quickbooks (I use this software to track my Solo 401k balances and transactions) but they would not accept that. The underwriters […]
How do I terminate my Solo 401k plan?
ANSWER: Terminating your Solo 401k plan includes the following steps: Distribute all assets of your Solo 401k plan Distributions may be taxable or non-taxable, depending on the type of distribution taken. Formally request to terminate your Solo 401k plan You must submit a request to us in writing for the termination of your Solo 401k […]