Out-of-pocket contributions are for owner-only businesses and spouses
Roth Salary Deferral can designate salary deferral contributions as Roth contributions and the portion contributed as Roth does not qualify for a tax deduction
Profit-Sharing are pre-taxed contributions and may provide a tax deduction in the year of the contribution
Funds and Investments in the Roth Solo 401(k) have no capital gains tax or federal/state income tax while inside the account
Roth Salary Deferral portion grows tax free
Profit-Sharing portion grows tax-deferred
Have questions about how to get started with one of these accounts? One of our Account Executives can walk you through the process. Contact us today.
1
What investments can I make using a self-directed IRA?
With a self-directed IRA, your investments are up to you, within the bounds of the IRS rules and guidelines. The IRS does not provide guidance on what investment types are permitted, but dictates only what is NOT permitted. Examples of prohibited IRA investments include collectible (such as artwork, stamps, rugs, antiques and gems), certain coins and life insurance. See IRS Publication 590 for more information about prohibited investments.
2
What is a self-directed IRA custodian?
All IRAs or other self-directed retirement accounts must be held by a custodial entity such as a bank, credit union, trust company or an entity that is licensed and regulated by the IRS as a “non-bank custodian.” A self-directed IRA custodian, such as Equity Trust Company, specializes in being the custodial entity for self-directed accounts.
3
What’s the difference between a self-directed IRA and a traditional IRA?
A self-directed IRA is technically no different than any other IRA or 401(k). A self-directed IRA is unique because of the investment options available. Most IRAs are used for stocks, bonds, mutual funds and CDs. A self-directed IRA allows those types of investments along with real estate, notes, private placements, and other investment options.
The above applies assuming IRS rules are followed and you meet eligibility requirements. Certain investments may be subject to Unrelated Business Income Tax, such as debt-financed real estate and Limited Partnerships, LLCs and other businesses conducted within the account. Visit irs.gov for more information.
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