401(k) PLAN
FOR SELF-EMPLOYED
TAX YEAR 2011 3,4
Who May Establish
Any business that employs only owners and their spouses ( includes corporations, partnerships, sole proprietors, and non-profit entities ). This plan is not suitable for businesses with employees.
Plan Set-Up Deadline
Anytime prior to the company tax-year end.
Eligibility
Begins at age 21, immediate entry and no service requirement.
Salary Deferral Contributions
Up to $16,500 ( not to exceed 100% of pay 1). Total salary deferral and employer contributions up to a maximum of $49,000.
Catch-Up Contributions
Individuals age 50 or older may contribute an additional $5,500 in salary deferrals beyond the $16,500 and this does not count towards the overall contribution limit of $49,000.
Employer Contributions
Up to 25% of pay 1 ( 20% for self-employed ), maximum $49,000. ( Salary deferral contributions are also counted towards the $49,000 limit).
Rollovers
Rollovers are allowed from traditional IRAs, SEP, SIMPLE 2, profit sharing, defined benefit, 401(k), 403(b) and governmental 457 plans.
Loans
Loans can be taken for up to 50% of account value ( $50,000 max ).
Withdrawals
Limited to certain events such as retirement, death or disability.
Government Reporting
Generally, IRS form 5500 filings not required for Solo 401(k) plans until assets exceed $250,000.
Fees
The following fees may apply per company:
• Annual administration fee and one-time setup fee
• Loan set-up fee and annual loan maintenance fee
• IRS 5500 preparation signature-ready 5500-EZ fee
Investment Choices
Growth/Equity/Bond/Real Estate mutual funds, money market funds, and annuities.
Other Features
• IRS approved plan document
• Daily valuation of individual accounts
• 24/7 account access
1 No more than $245,000 of pay can be taken into account.
2 SIMPLE IRA assets eligible for rollover after two-year holding period is met.
3 Source: WWW.IRS.GOV
4 Consult your tax advisor regarding tax consequences.
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