Small business owners and independent contractors in Texas are turning to Dallas Solo 401k plan for a retirement solution that best fit their needs. Dallas Solo 401k is designed for self employed contractors and business owners without an employee. The plan offers many advantages to account holders to help them plan successful retirement funds.
The Dallas Solo 401k is a qualified retirement plan that is similar to other plans under the Employment Retirement Income Security Act of 1974 (ERISA). It offers many unique features, however.
Below are some of the features of the Dallas Solo 401k:
Salary deferral and profit sharing contribution:
As a self employed business owner or contractor, a plan holder of Dallas Solo 401k account can make contribution both as the employer and the employee of their business. In 2014, the maximum limit is $52,000. For those who are at least 50 years old, a catch up contribution is allowed, bringing total contribution to $57,500 a year.
Each Dallas Solo 401k plan can have a Roth account, which can take after-tax contributions. Since the tax is paid upfront as with other Roth plan, account holders will not have to pay tax at the time of withdrawals. In other words, all gains from investing the after-tax contributions will be tax-free.
Penalty-free loan for Dallas Solo 401k
As small business owners can experience a cash shortage from time to time, one of many unique features that a Dallas Solo 401k offers is the penalty-free loan. With this, account holders can take out up to $50,000 or half of their account’s total value as a loan. The loan is tax-free, penalty free, provided that it is paid back within 5 years following specified terms in the loan documents.
Easy banking setup
Small business owners can open a bank account in any bank or credit union they trust for their Dallas Solo 401k plan.
Leverage real estate investment with no tax
Dallas investors with a Solo 401k plan can us non-recourse financing to purchase real estate investment for their plan. Unlike an IRA, this use of financing is not taxed with Unrelated Business Income Tax.
These are just a few features of the Dallas Solo 401k plan. This retirement solution has become the most desired plan for self employed individuals.