Little Known IRS Tax Credit Helping IRA Financial Group Clients Offset Set-Up of Self-Directed Solo 401(k) Plan, According to IRA Financial Group Tax Attorney

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IRA Financial Group’s seen an increase number of Solo 401(k) Plan client’s using eligible small employer tax credit to offset cost of Solo 401(k) Plan

Solo 401(k) Plan $1500 Credit

With the Eligible Small Employer Tax Credit, our clients have been able to use the credit to cover the entire set-up the solo 401(k) Plan,

IRA Financial Group, the leading facilitator of self directed Solo 401k Plans announced that it has witnessed a strong demand for its Solo 401(k) Plan largely due to the Eligible Small Employer Tax Credit. For an eligible small employer, the Eligible Small Employer tax credit is 50% of the qualified startup costs paid or incurred during the tax year. The credit is limited to $500 per year for the first credit year and each of the following 2 tax years or a total of $1,500 credit over a three year period. “With the Eligible Small Employer Tax Credit, our clients have been able to use the credit to cover the entire set-up the solo 401(k) Plan,” stated Adam Bergman, a tax attorney with the IRA Financial Group.

“The high costs associated with adopting a 401(k) qualified retirement plan have always been a major barrier to small businesses who what to start a 401k plan. Accordingly a provision in the 2001 Economic Growth and Tax Relief and Reconciliation Act (EGTRRA) was adopted to help eliminate this barrier to employee saving opportunities. The EGTRRA established a credit for employers to offset the start-up cost and the cost of educating employees about the new plan.

“For costs paid or incurred in connection with the establishment of a Solo 401(k) Plan in tax years beginning after December 31, 2001, the adopting small business employer would be eligible to claim a tax credit for part of the ordinary and necessary costs of adopting the plan, “ stated Mr. Bergman. The credit equals 50% of the cost to set up and administer the plan and educate employees about the plan, up to a maximum of $500 per year for each of the first three years of the plan.

To be an eligible small employer, the small business must have had no more than 100 employees during the tax year preceding the first credit year who received at least $5,000 of compensation from you during that tax year. However, a small business would not be an eligible small employer if, during the three tax years preceding the first credit year, the business established or maintained a qualified employer plan with respect to which contributions were made, or benefits were accrued, for substantially the same employees as are in the new qualified employer plan.

In order to take advantage of the Eligible Small Employer Tax Credit, the expense must be associated with either the establishing or administering an eligible employer plan; or the retirement-related education of employees about the plan. “IRA Financial Group’s Solo 401(k) Plan would satisfy the eligible employer plan requirement, “ stated Mr. Bergman.

“The beauty of the Eligible Small Employer Tax Credit is that the credit can be applied to the preceding tax year before the plan has been adopted, “ stated Maria Ritsi, a senior paralegal with the IRA Financial Group. For example, a calendar-year eligible small employer whose eligible plan is first effective on January 1, 2013, may elect to treat 2012 as the first credit year and claim the credit on its 2012 tax return for qualified start-up costs incurred in 2012. “This rule has allowed our clients to offset the entire set-up cost for our self-directed solo 401(k) Plan, “ stated Ms. Ritsi.

IRA Financial Group’s self-directed Solo 401(k) Plan was designed to offer investors a diverse and wide array of investment opportunities for their retirement funds. Clients can purchase stocks, mutual funds, precious metals, real estate, and much more. In addition, the Solo 401K Plan account can be opened at any local bank and financial institution, including Fidelity, Scottrade, TD Ameitrade and more . In addition, IRA Financial Group’s Solo 401(k) Plan will allow a self-employed individual or small business owner the ability to defer up to $51,000 ($56,500 for someone over the age of 50), as well as gain the ability to borrow up to $50,000 tax and penalty free and use the loan proceeds for any purpose.

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, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market's leading “checkbook control Self Directed IRA Facilitator. IRA Financial Group has 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 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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