Archive for February, 2013

Does the IRA Financial Group’s Solo 401(k) Plan allow for Roth Contributions?

February 21st, 2013

Yes. IRA Financial Group’s Solo 401(k) Plan allows participants to elect to treat contributions under the plan that would otherwise be elective deferrals as designated Roth contributions. For this purpose, an “elective deferral” is an employer contribution to a  401(k) plan that is excluded from the participant’s gross income only because the 401(k) plan is […]

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As a beneficiary of a Solo 401(k) Plan, what are my options for inherited plans?

February 15th, 2013

If you are a beneficiary (rather than the owner) of a qualified plan and receive a distribution as a result of the owner’s death, in general you have the following options: Pay ordinary income tax: If plan assets are distributed to you, then you will have to report the distribution as income on your tax […]

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How should a Solo 401(k) Plan Trustee administer a 401(k) Plan with Roth Contributions?

February 4th, 2013

A trustee of a Solo 401(k) Plan with a qualified Roth contribution program must establish separate accounts including only designated Roth contributions and “earnings properly allocable to the contributions,” and the plan administrator must maintain separate records for these accounts. Since distributions from accounts containing elective deferrals are included in distributees’ gross income, while distributions […]

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