|
Tax and Accounting News
PRESS RELEASE ARCHIVES FROM SEND2PRESS® NEWSWIRE
NOTICE: THIS IS ARCHIVAL CONTENT AND LIKELY OUT OF DATE.
Solo 401(k) Attracts Small Business Loans
Article Editor: Christopher Laird Simmons
ALEXANDRIA, VA - Oct. 13, 2004 /Send2Press Newswire/ -- When seeking money to boost their new business many entrepreneurs are turning to the Solo 401(k) to get a loan, says Lamaute Capital, Inc., an investment firm specializing in retirement plans.
Solo 401(k) retirement plans with a loan feature first became available after the tax law changes of 2001. These changes allowed a business owner to take a loan from his 401(k) account and therefore avoid the 10% tax penalty generally associated with early withdrawals. In the past year Lamaute Capital reports seeing increased traffic on its website www.Click2Borrow.com from business owners interested in the Solo 401(k) and its loan feature.
The Solo 401(k), also called a Self-Employed 401(k) or Individual 401(k), is designed for businesses with no employees. Most owners initially fund their Solo 401(k) plan by rolling over an existing IRA, 401(k) from a previous employer, or other tax deferred retirement funds into the plan. They can then borrow up to the lesser of $50,000 or 50-percent of the balance in their Solo 401(k).
A loan from a Solo 401(k) is fast to obtain because one is in effect taking the money from his account. In many cases the 401(k) loan interest is fixed at prime rate for the duration of the loan, generally five years or more. The loan payments, interest and principal, are put back in the 401(k) account.
Although a loan from a 401(k) plan is free of tax and early withdrawal penalty; if the loan is not paid back on schedule the IRS will treat the balance of the loan as a distribution subject to taxes and a possible 10% penalty. Also: 401(k) loan payments are not tax deductible.
Another feature of the Solo 401(k) attracting attention is its generous contribution limits. The contribution for a 401(k) is calculated in a way that lets the account owner put away a greater tax-deductible contribution than is often possible thru older plans such as the Keogh, SEP IRA or SIMPLE IRA.
The Solo 401(k) is available to any business that employs only owners and their spouses, including C corporations, S corporations, partnerships, and sole proprietors. This 401(k) is not suitable for companies with employees, or those that plan to hire employees. The deadline to establish a Solo 401(k) is December 31 or the business tax year-end.
Organization Website:
www.Click2Borrow.com
Source of News:
Lamaute Capital, Inc.
THIS IS ARCHIVAL CONTENT
Note: for contact information at the organization mentioned in the above PRESS RELEASE, visit the "organization website" (if applicable), or view either version of the original news release using the links below. Send2Press cannot provide contact info.
Business News is powered by
eNewsChannels™
Viewed by the media ***
FOR INFORMATION ABOUT THE ORGANIZATION(S) MENTIONED IN THE ABOVE NEWS ARTICLE, PLEASE CONTACT THE COMPANY DIRECTLY AND NOT THIS WEBSITE.
DISCLAIMER: the above article is believed accurate but not guaranteed, and is based on business news supplied by the organization mentioned and/or quoted in the story. The organization providing the news to Send2Press is solely responsible for its accuracy. Financial/Stock news may contain forward looking statements and public companies should be thoroughly researched before considering material investment. Neotrope/Send2Press makes no claims of accuracy or suitability for any purpose. Any opinions expressed by representatives of company(s) mentioned in news item are solely those of the person indicated, and do not reflect any opinion or policy of Neotrope/Send2Press. Your use of any information contained herein is done solely at your own risk, and you are fully responsible for using any information herein, or on sites mentioned or linked to in the article. All trademarks acknowledged.
USE OF THE ABOVE NEWS ARTICLE
News is Copr. © 2004 Neotrope/Send2Press. Reproduction of this news article in any form requires written authorization. You may freely link to this article, or republish the "news release" text version linked to above under "Journalist Tools" without restriction except websites must retain /Send2Press Newswire/ as the source. Sites which offer/sell PR services or newswire services may not reprint our content without express written permission.
|
