IRA Financial Group Report Shows How an Individual 401(k) Plan Can Cut a Small Business Owner's Tax Bill by up to $15,000 Annually

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An Individual 401(k) Plan allows a self-employed individual to contribute up to $22,500 annually and reduce his or her tax bill by as much as $15,000 annually.

Individual 401K Plan

The individual 401(k) plan will allow a small business owner to reduce his or her tax liability by as much of $15,000, significantly larger than any other retirement plan

IRA Financial Group, the leading provider of self-directed individual 401(k) Plans, announces the results of an internal report that suggests that self-employed individuals and small business owners can reduce their tax bill for the 2012 taxable year of up to $15,000 by maximizing contributions to a solo 401K plan also known as an individual 401K Plan. “The individual 401(k) plan will allow a small business owner to reduce his or her tax liability by as much of $15,000, significantly larger than any other retirement plan”, stated Maria Ritsi, a paralegal with the IRA Financial Group. “The individual 401(k) Plan can be used as a retirement vehicle as well as an investment vehicle, allowing a retirement holder to buy real estate and much tax-free, “ stated Ms. Ritsi.

In 2002, the Economic Growth and Tax Reconciliation Act granted the solo 401(k) equal benefits to a traditional 401(k), greatly popularizing the plan. The flexible retirement plan quickly gained widespread praise and recognition-- mainly for its substantially higher contribution limits, which include employee deferral contributions as well as profit sharing contributions. For 2012, the maximum 401(k) plan contribution is $50,000 for individuals under 50 years old and $55,000 for those over 50 years old. Whereas, most corporate 401(k) qualified retirement plans only allow their plan participants, including executives, to make employee deferral contributions which is limited to just $17,000 for those employees under the age of 50 and $22,500 for those over 50 years old. The solo 401(k) plan also allows self-employed individuals, such as realtors to make non-traditional investments with their solo 401(k0 funds, including real estate. Whereas, the majority of the large corporation 401(k) plan only allow for traditional types of investments, such as mutual funds. “The high contribution limitations couples with the investment opportunities provide self-employed real estate professionals with a far more attractive retirement option than most corporative executives, “ stated Mr. Bergman.

IRA Financial Group’s solo 401K plan is unique and so popular for real estate professionals because it is designed explicitly for self-employed professionals. With IRA Financial Group’s solo 401K plan, self-employed individuals or small business owners with no employees can benefit by making high annual contributions – up to $50,000 - with an additional $5,500 catch-up contribution for those over age 50, make traditional as well as non-traditional investments, such as real estate, as well as borrow up to $50,000 or 50% of their account value tax-free and penalty free. IRA Financial Group’s solo 401(k) plan is a trustee directed plan meaning the trustee and not the custodian is in charge of making investment decisions on behalf of the plan. With an individual 401K plan, in most cases the trustee will be the plan participant providing the plan participant with greater control and investment authority over his or her retirement funds. In addition, with IRA Financial Group’s solo 401K Plan, the plan account can be opened at any local bank, including Chase, Wells Fargo, and even Fidelity.

IRA Financial Group’s solo 401K plan is easy to operate. There is generally no annual filing requirement unless the fair market value of the assets in the solo 401K Plan exceed $250,000, in which case a short information return will be required to be filed with the IRS (Form 5500-EZ).

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP and Dewey & LeBoeuf LLP.

IRA Financial Group is the market’s leading “Checkbook Control” Self Directed IRA and Solo 401k Plan Facilitator. We have helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate tax-free and without custodian consent!

To learn more about the IRA Financial Group please visit our website at or call 800-472-0646.

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Jaclyn Baily
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