Archive for April, 2014

Invest How You Want With A Self Directed 401k

Friday, April 18th, 2014

Self Directed 401k invest how you want

A Self Directed 401K, is a 401K plan setup for your company. As the Manager of the company, you can act as the Trustee for the Plan's monies. Like a self directed IRA, the Self Directed 401k enables you to self direct your investments, but in this case it is on behalf of your 401K. The investments can be in real estate, other companies, private placements, physical gold and silver, or your own C-Corp. The use of this type of structure enables you to have investment and checkbook control over the 401K and eliminates custodian involvement and hassles, regardless of the investments.

The most common Self directed 401k plan that we create for our clients is a solo 401k.  A solo 401k is a 401k in which there in only one participant (husband and wife are considered one person).  A solo 401k has also been called a Solo-k, Uni-k, or one participant k.  The rules for a solo 401k are the same as any other 401k with one exception which will be discussed in the article.

Contribution Limits

Contributions to a 401k come in two parts:  employee contributions and employer matching contributions.  An employee can contribute for 2013 and 2014, $17,500 or $23,000 if age 50 or older.

The employer (company) can contribute up to 25% of compensation as described by the plan.  If you are self employed you must use a special computation to figure out how much the company can match.  The self employed income must be “earned” income.  The computation can be found in chapter 5 of IRS Publication 560

Total contributions to a participant’s account, not counting catch-up contributions, cannot exceed $51,000 for 2013 and $52,000 for 2014.


Below is an example taken from the IRS website on the amount of funds that can be put into a solo 401k:

“Ben, age 51, earned $50,000 in W-2 wages from his S Corporation in 2013. He deferred $17,500 in regular elective deferrals plus $5,500 in catch-up contributions to the 401(k) plan. His business contributed 25% of his compensation to the plan, $12,500. Total contributions to the plan for 2013 were $35,500. This is the maximum that can be contributed to the plan for Ben for 2013.”

If Ben had earned $100,00 in W-2 wages then the company could have matched $25,000 (25% of $100k) in employer matching contributions.

Solo 401k Rules

Self directed 401k  that are a one participant plan do not need to go through the same testing requirements as 401k’s with multiple employees.  If you do not have any employees then the business owner is not required to perform nondiscrimination testing for the plan.  This is because there are no employees to discriminate against.

In addition, the 401k would need to file an annual 5500ez if the value of the 401k is over $250,000.  If the value is under $250,000 then no filing requirements are required for the 401k.

A self directed 401k can be a great way to maximize your retirement planning while minimizing your tax burden with the IRS.  By combining the benefits of the high contributions limits to a self directed 401k with self direction you can dramatically increase your retirement portfolio through the great returns you can get.  It is also a great way to diversify your retirement portfolio as well. There are plenty of reasons why a self directed 401k is a great option.

If you are interested in learning more about a self directed 401k feel free to contact us today.


Startup Investing Is Blowing Up. Take Advantage And Invest With Your IRA.

Wednesday, April 16th, 2014

Private Placements Investing

Since the beginning of 2014 we are seeing startups disturb just about every niche of every industry. Much of this is because it is so much easier today to start up that business you always dreamed of. Because of that we are seeing so many amazing ideas come out that are actually able to come to fruition.

One major reason it is easier to start that company you always dreamed of is that there are so many building blocks available for those wanting to start their company. There is free education on the internet available, open source code and APIs available to get you going. This is allowing new startups to keep new business costs super low.

Another building block that has a huge impact on the ability to get that startup idea into an actual company is the ease to secure capital  With the advent of online startup investment platforms there are more ways than ever before to get that money you need to get your business ideas into an actual product, service, ect.

Startups are finding a way to make it in a world of big business. Startups are a huge force to be reckoned with and it doesn't seem like anything will change for the near future. In fact, Forbes recently put out an article stating why startup investing will blow up. The following are the three reasons they say it will blow up

1- The leading industries are growing at record levels
Forbes states that over the past three years the top sectors for startup companies have been internet, healthcare and mobile/telecom. Suposedly these sectors alone received around 78.8% of angel dollars. The average round size for these three sectors also grew.

As innovations continue to come out in technology this seems to confirm the prediction that over the coming years these industries will only continue to grow.

2- The benefits of startup investing are apparent and interest is increasing
A report by SharesPost wrote about historical return analysis and asset allocation strategies detailing investments in private growth companies that showed the benefit of alternative assets in any investment portfolio. The key though is that it was concluded that an investor who allocates just 5% to private growth companies or alternative assets, and the remainder to benchmarked portfolios, could have experienced significantly higher returns.

Again, the trend is pointing to increasing growth and trends.

3- Startup investing is on the verge of accessibility to the the general public
On September 23, 2013  the ban on general solicitation was lifted via Title II of the JOBS Act, and proposed rules for Title III have been set and commented upon. With all of this change that is happening with startups the laws haven't been nearly has updated as they should be. With the new changes in the laws it makes it even easier for startups to head in the right direction. With the advent of online equity crowdfunding there probably hasn't been anything bigger to help take the ideas of investors and make them into real companies.

What does this mean? It means that we are living in exciting times. The times where only the rich and famous could invest in startups is coming to an end. The near future will allow for greater access to the general public. Sadly though we aren't quite there yet for those who want to invest in business. For those who are aren't considered rich one of the only ways that they can invest in any business is through private placements.

One of the biggest issues to investing in private placements for those that are not rich is coming up with the money. A way to get past this issue is to use the money in your IRA. Investing in private placements can be a great way to diversify your retirement portfolio. Investing in private placements through a self directed IRA is a solid way to invest in startups.

Now is one of the greatest times to invest in private placements and startups with an IRA. With the potential growth that can come with a startup it can really take your retirement portfolio to the next level. Now is the time to diverisfy your retirement portfolio with a self directed IRA.

For more information about private placement investing with a self directed IRA contact us today.


The Stock Market Outlook Is Very Shaky. Diversify Now!

Monday, April 14th, 2014

The Stock Market Has A Shaky Outlook

IRAs and 401ks are retirement accounts that give you great tax benefits for retirement. Typically there isn't much diversity in most retirement accounts because most IRAs and 401ks are invested in stocks and bonds. This leaves your retirement accounts very dependent on how well the stock market does. The stock market is quite risky and the current state of the stock market is pretty shaky.

Current Stock Market Outlook

The S&P 500 Index was up 1.8% during the first quarter of 2014 while the Down Jones Industrial Average was down .2% for the quarter. The performance is nothing to write home about. There are many investor gurus who are quite skeptical about the near future of the stock market. There are plenty gurus that have the opinion that the US and global economies are likely to have a slow steady growth over the next several months. Even though the outlook seems to be on the rise there seems to be a big consensus that it will be a pretty bumpy ride over the next few months.With that said there is also a lot of consensus that there seems to be a correction on the horizon but who knows when. At the end of the day nobody knows what the future holds for the US and foreign markets.

What Does All This Mean

What it really comes down to is that there isn't any sure way to tell what the market holds but there are ways to get an idea of what it holds and the true future outlook is shaky! Knowing that the future outlook is shaky what should you do? You should diversify!


It is very smart to diversify your investment portfolio, especially your retirement portfolio. Diversifying your portfolio is always a very wise decision. There is truth that a diversified portfolio might not be able to make as much as other non diversified portfolios but because it is very hard to actually beat the markets all the time it is good to have a great spread. To learn more about diversifying your retirement account check out, The Way To Diversify Your Retirement Portfolio.

Diversify Through A Self Directed IRA

While you can diversify your retirement account by making sure that the stocks and bonds that you carry are quite diverse and fairly evenly weighted. While this is an option for diversifying it isn't the best way to diversify your retirement account. The best way to diversify your retirement account is through a self directed IRA or self directed 401k.

What a Self Directed IRA and Self Directed 401k Allow you To Do

A self directed IRA and 401k allow you to invest in things that aren't normally available to you through most custodians. Most custodians (those who hold your retirement account and invest it for you) do not allow for investing in much else besides stocks and bonds. This is pretty lame becaues you are missing out on investing with your retirement more diversly and you are also potentially missing out on great investments while getting the great tax benefits that come with a retirement account. If you would like to invest your retirement in things other stocks and bonds you typically have to go to a custodian that allows for self directed retirement accounts.

What Types of Investments Are Allowed In A Self Directed IRA And 401k

Self Directed IRAs and 401ks offer just about endless possibilities to investing with your retirement accounts. Just about anything you can dream of investing is is possible through a self directed account. What are some of the most popular investment types in a self directed IRA? Gold, silver and real estate are some of the biggest investment types along with private placements. Because you are able to do just about any type of investment with a self directed account there is no better way to diversify your retirement account. If you feel the stock market is going to be in a bad spot over the next while why not invest in gold or real estate?

There are so many ways to diversify your retirement portfolio through a self directed IRA. Take advantage now by setting up an account or call us and learn more about what a self directed IRA can do for you. Don't wait long to take advantage especially  while there is a lot of uncertainty about the current future of stocks.


Contribute Now To Your Self Directed IRA Before You Can’t Anymore

Friday, April 11th, 2014

Self Directed IRA Contribution

It is tax time. Don't you love it? I am guessing more than likely you do not love it. If you are like the majority of everyone else then you haven't even started filing your taxes. If you are also like many people you never contributed to your self directed IRA for 2013. Don't fret because as long as you really haven't filed your taxes yet you still have time contribute to your self directed IRA for 2013. Don't take all the time in the world though because time is running very thin.

When is my last day to contribute to my self directed IRA?
You can theoretically contribute to your self directed IRA and any IRA for that matter until April 15. But the issue with waiting until April 15 to actually contribute for the previous year is that is the same day your taxes are due and need to be filed. You need to remember that just because you have until April 15 to submit your contribution it doesn't mean that you should wait until then. Trust me trying to finalize your 2013 contribution for along with finishing your 2013 taxes all on the same day is NOT fun.

How can this be done

If you do or don't have a self directed IRA set up currently you can still take advantage of setting one up and investing in some of the other non-traditional investments that are available through a self directed account. One example of what you can do: Set up your self directed account and then contribute your money to your account. One smart thing to do is since you are taking the time to contribute to your IRA if you have the extra cash and have made enough in 2014 you might as well contribute for 2014 as well. If you contribute the general max contribution for 2013 ($5,500) and 2014 ($5,500) you will be adding $11,000 to your new or existing self directed IRA account. With that money you then can invest it into alternative investments like gold or other precious metals.

Maximize your retirement

It is so important to contribute to your retirement accounts in order to get the most out of your future retirement. If you are not contributing to your retirement accounts you in theory are losing valuable tax savings when you finally do retire. If you haven't seen how much time is a major factor in retirement savings. The earlier you start contributing to your retirement less you have to put into your retirement to get to a certain retirement account value. Likewise the later you start the more you you will have to contribute each year. It really does pay to contribute to your retirement accounts each year.

Feel free to contact us if you need any help contributing to your self directed IRA account.


IRA Ruling Is A Game Changer

Wednesday, April 9th, 2014

IRA Rollover Ruling

The Tax Court of the United States has recently ruled that the one rollover per year rule now applies to all of a taxpayer’s IRAs and not just each IRA seperately. This is now confilicting with Publication 590 which is the publication for IRA rules and if you know anything about IRAs you know that Publication 590 has been the say all for IRA laws and rules. Because of this there are many that are involved with IRAs that have been pretty shocked by the new ruling.

How Can Money Be Moved Between IRAs

Transfers– This is a very popular way to move your IRA money to another IRA. The reason for this is that there is no reporting to the IRS on your tax return. Why don’t you have to report this? Simply because you never touch the money. You can also do this as often as you like at any time you wish.

Rollover– This method allows the IRA owner to take the money as a distribution and they have 60 days to rollover / put back the same amount that was distributed to them in an IRA. This can only be done once every 12 months.

As I mentioned earlier Publication 590 is in direct conflict with the way a rollover works now. For roughly the past 20 years the rollover method has applied to each IRA. What that means is if you had 5 IRAs, you could do 5 rollovers every (one per IRA) 12 months.

So What Does This All Come Down To

First, all of us have been operating under the impression that Publication 590 (published by the IRS) was correct. But It is not correct anymore. A popular guru on IRAs explains how to deal with conflicting information, “If conflicting information is provided in multiple sources, one must consider the hierarchy and reliability of such sources. In this case, Publication 590 is not authoritative and is not considered official guidance. The Tax Code is the more authoritative, and supersedes any other guidance in the event of conflict.” Read more from Publication 590 and see for yourself what is says.

What Happens Next

Supposedly, the IRS will be changing its publication to make it in accordance with tax code. It is now a wise decision to make sure you are only doing one rollover no matter how many IRAs you have. You should start moving your IRA money through transfers instead of rollovers. Rollovers just have too many pitfalls while transfers are much less risky and don’t have the pitfalls that rollovers.

Making sure you move your IRA money correctly is very important. If done incorrectly it can mean that your IRA gets canceled out and you’ll get hit with taxes. You must make sure you are doing everything that you can do to it correctly. It is very wise and important to get quality information and use the best of companies to help you through the process. One of the best things you can do is to have a very smart and reputable tax account to help you know exactly the tax laws that you need to abide by. We at Accuplan Benefits Services can help you with your IRA transfers and with any Self Directed IRA investing.