Tuesday, July 9, 2013

Flying Solo?

Are you flying solo as a small business person? Do you work for yourself or have your own LLC or S-Corp? Do you have a Solo 401(k)? Ideally it is best if you are the only employee as it makes things a little simpler, but you can have up to five employees with a Solo 401(k). You do not have to be incorporated, but you do want to pay yourself a salary. By paying yourself a salary, you can salary deduct up to $17,000 per year with an over 50 catch up contribution of another $5,500 per year. Theoretically, you can put up to $51,000 into a Solo 401(k) in 2013 with a Profit Sharing contribution to make up the difference. You can put up to 100% of your compensation, or $51,000 into this plan.

Now is the time to get started. If you are okay with traditional investments like mutual funds, ETF's and stocks, then Schwab, Fidelity or TD Ameritrade all have Solo 401(k) plans. However, you probably want an adviser like me to help you.

Here is why it might be a wise decision on your part to consider me as your adviser. Did you know that if you have an old 401(k) that you can re-roll it back into your new Solo 401(k)? That is only if you haven't messed things up by rolling it into an IRA Rollover account and combining it with a different IRA. Assuming that you have either left it at your former employer, or you rolled it over and kept it separate from your other IRA's, then you are good to go. You might have well over $100,000 right out of the gate.

Another reason you might want to hire me is that now that you have re-rolled your old 401(k)/IRA Rollover into your newly created Solo 401(k), you can now by real estate with the funds. Yes, you can buy real estate with your Solo 401(k). For that matter, you can buy real estate in your IRA or Roth IRA, too. Oh by the way, you can have a designated Roth account with your Solo 401(k). This means that your salary deduction amount can all go into this Designated Roth 401(k) which is tax free.

I can literally go on and on with planning ideas. Each case is different, but rest assured, I can provide great solutions for you.

A third reason to hire me is because you can pool Your Solo 401(k), your IRA, your Roth IRA and even combine with other family members accounts to buy real estate. Friends or business partners can combine their accounts, too. 

Think about this example. Suppose you are a two person law firm with a paralegal and a clerical person. You both have old 401(k)'s that you rolled into your new Solo 401(k). Your paralegal and clerical person can buy traditional investments with their accounts. However, you two attorneys can purchase your own office building with your Solo 401(k). Why? Because these Solo 401(k) accounts can hold the real estate until you are ready to sell and hopefully inflate the value of your accounts in the process.

A final reason to hire me is that there are a myriad of IRS rules involving buying real estate in these accounts. I can help keep you on the straight and narrow, help you find properties as a real estate agent, in addition to being an Investment Adviser.

If you are a real estate agent, a real estate agent team, a CPA, an attorney or other self-employed business person, then you really ought to take a look at these options. After all, it's your business and your future.

So, if you want to know more, then give me a call at (904) 547-2913.