Reasons You should set up a Solo 401k as part of your

Tax Planning.

What is a Solo 401k?

A Solo 401k is a great retirement plan for self-employed individuals or business owners with no employees or part-time employees only. Business types such as sole proprietorships, family businesses, partnerships and corporations can take advantage of what the Solo 401k has to offer--maximized savings at a low cost and the flexibility to invest in traditional and alternative investments tax free or by deferring taxes.

There are many features of the solo 401k that make it attractive to business owners:

Alternative Assets & Equity Investments

A Solo 401k allows you to invest in many types of investments including; stocks, mutual funds, real estate, hedge funds, gold, private loans, private equity and more.

Participant Loans

With a Solo 401k, you can take out a loan or borrow from your retirement funds.. Loans can be processed from the Solo 401k at 50% of the account balance but cannot exceed $50,000.

Who is eligible to open a Solo 401k?

Any business owner and their spouse can open a Solo 401k. There can be no participation from full time employees in the business.

What type of business must I own to qualify for a Solo 401k?

Eligible businesses must:

Be self-employed without any employees

Have part-time employees who work less than 1,000 hours per year

You are trying to put away as much as possible for retirement.

Company types that can adopt a Solo 401k:

These include: Sole proprietorships, Partnerships, Corporations, LLCs and family businesses.

Solo 401k versus Self-Directed IRA

After extensive research and talking to different companies, I recommend a Solo 401k over a Self-directed IRA for the following reasons:

1. Contribution is higher with Solo401K than SDIRA.

To me, the most important difference is the contribution limits. The max for a SEP-IRA is up to 25% of compensation with a cap of $49,000 for 2011. On the other hand a Solo 401(k) allows profit sharing contributions of up to 25% of compensation plus tax-deductible salary deferrals to the plan of up to $16,500 for 2011. The cap is the same at $49,000.

So while the caps are the same, you can make very little self-employed income and basically defer it all, which you can’t do with the SEP-IRA. This gives you that added flexibility which is especially beneficial for those who have some self-employed income as secondary income and want to get the most tax advantages. For example, if you made $15,000 of eligible compensation, you could sock all $15,000 of it away with a Self-Employed 401(k), but only $3,750 with a SEP-IRA.

2. Solo 401k Allows for Loans

A Solo 401k loan is permitted at any time using the accumulated balance of the Solo 401k as collateral for the loan. Loans in a Solo 401k are permitted up to 1/2 of the total balance of the Solo 401k up to a maximum of $50,000.

3. Administrative burden is minimal.

There is no need to hire a custodian for a Solo 401k. While IRA & 401k plans are both technically trusts, only IRAs require a bank or trust company to serve the role of trustee. As a qualified plan, a 401k carries no restrictions on who can serve as trustee.

4. Low set up cost since you do not have to pay the typical fees that you would pay to custodian and trustees. Solo 401ks are easy to set-up and inexpensive to maintain – Unlike larger 401(k) plans, there are no complicated administrative requirements. You have to file an IRS Form 5500-EZ when plan assets exceed $250,000.

5. Flexibility and speed in investing since you bypass custodian approvals

6.Plan can be set up by 12/31 but contributions can be made up to tax extension time depending on your entity structure .

Grow, Control , Direct Your Solo 401k | Self-Directed 401k | Solo K

Work through us with our preferred custodian. We charge $695 upfront and then $195/year to maintain. Our services include the following:

• Facilitation of your investments (optional):

• Participant or Solo 401(k) Loan fees (origination and annual maintenance) (optional):

• IRS Form 5500 preparation (optional):

• For all annual distributions, preparation of Form 1099R (optional):

• QDRO review and processing:

• Assistance and forms for transferring IRAs or other 401ks to your new Solo 401k:

• Annual Compliance Testing (optional):

• Investment Forms(optional):

• Full customer service support including on Saturday:

• Maintaining qualified plan documents

• Amendments as required to keep up with tax law changes

• Documents that are GUST and EGTRRA-compliant

• Assistance in setting-up checking account for your Solo 401k

• Facilitation of your alternative investments

• Administration of your personal loan

• Assistance in transferring IRAs or other 401ks into your new solo 401k

• Computation of plan contribution amounts

• preparation of plan tax forms

• interpretation of plan provisions

• Annual Compliance Testing

With us as your retirement plan's co-manager, you take advantage of our:

• time and resources to maintain the financial books and records
• expertise in the IRS and ERISA regulations that govern IRAs, especially those defining prohibited and disqualified parties.
• significant experience in purchasing and management of non-traditional assets such as tax liens, promissory notes, and investment real estate
• professional guidance every step of the way as you structure your IRA's more complex transactions

FREQUENTLY ASKED QUESTIONS

1 Question: MySolo401k.net is the plan provider, correct?

Answer: MySOLO401K.net is the setup organization and we are the plan providers.

2. Question: It seems that Ace Taxes is providing the same services listed for MySolo401k.net. How does that relationship work between the two of you? And, do I deal directly with Ace Taxes or with MySolo401k.net?

Answer: You deal directly with us. MySOLO401k is our fulfillment or set up organization. Because you are part of the Wealth Building Program, we act as your co-manager. Most of the other companies out there either want to act as the custodians or the facilitators and that's not what we need. We need 100% self-direction and Mysolo401k offers that opportunity.

3. Question: If I open a checking account with a bank, they hold the money, right?

Answer: The checking account is under your control and you are holding the money because you are the custodian of that account. This is where we come in to ensure that the account does not violate the solo401k rules on prohibited transaction.

4.

Question: I thought this would be the role of MySolo401k.net.? Answer: No all, Mysolo401k.net is our set up organization. Everything else is left to us and that's why I chose them and that's why the fee structure with them is this low.

5. Question: Which banks have your clients had the easiest luck with in establishing these accounts?

Answer: It really is not that complicated. I think it's better to go with the bank that you currently have your business account with.

6. Question: The fees that Ace Taxes has outlined is $695 first year fee (paid) and $195 for subsequent years. Does that cover the fees for MySolo401k.net too?

Answer: Yes, we work with Mysolo to open up the plan and then we work with you to facilitate and direct the plan.

7. Question: I see the price listing on MySolo401k.net. Can I expect any additional fees?

Answer: No, that's the whole reason we work with them. Because they give us the flexibility of using the client as the custodian, there are not additional fees beyond the yearly fees and of course your fees to our wealth building plan.

8. Question: Is the difference in cost between Ace Taxes and MySolo401k.net, your fee for services?

Answer: Yes

9. Question: The Agreement that I sign with MySolo401k.net specifies that I need to pay according to schedule. Does my payment go to Ace Taxes and then you compensate MySolo401k.net on my behalf? The agreement states that they will charge my credit card on file for the annual subscription renewal.

Answer: Yes, you pay us and we pay them. This is typically the way we work with our clients on all our services. For entity structuring, you pay us and we pay the state, etc.

10. Question: In section 2.04 of MySolo401k.net Agreement Services, the document refers to Custodian. Who is the Custodian and is that the bank with my checking account?

Answer: You are the custodian and we are co-custodians. The checking account is more of the asset that the plan has.

11. How long does it take for the complete process of account setup and roll over of funds into the new account?

1 week based on when the IRA custodian releases the funds?