Did you max out the contribution limits in your IRA for 2017? If not, you still have time. In fact, you can make last-minute contributions to your IRA for 2017 and get a head-start on your contributions for 2018 right now, before you file taxes for 2017.
While you are unable to borrow funds from an IRA to give yourself or a business you own capital, you are able to do so using funds from a qualified plan, such as a 401(k). The following case study outlines the different options in structuring these types of transactions, which can be performed in typical or self-directed qualified plans.
The last week in January, the Obama administration announced a proposal, which if approved will make retirement planning easier for many Americans. In the face of today’s retirement planning crisis, this is good news for many. A large number of individuals across the country are unable to participate in savings accounts either because plans are not offered by employers or because of their own budgeting challenges.
Also known as an individual(k) or solo 401(k) plan, this retirement account is designed for small businesses where the only employees are the business owners and/or their spouses. Examples for qualifying businesses could be sole proprietorships, partnerships, LLCs, and corporations, so long as you do not have any employees who work more than 1,000 hours a year and are over the age of 21.
Small business owners are able to take advantage of a very beneficial retirement savings account commonly called an individual(k). These are profit sharing plans with a 401(k) option, but involve more relaxed compliance rules and minimal cost compared to a traditional 401(k). There are also Roth options available for this type of plan—allowing salary deferral contributions to be made on a post-tax basis. Another bonus is that individual(k) accounts can be self-directed.