Solo 401 k Deadline Is Approaching: Last Chance for 2015
There are less than two months left of 2015. While many of us are looking forward to the holiday seasons, there are year-end matters that also need to be taken care of. For small business owners and self employed individuals, tax planning and finances are probably on their minds. Fortunately, there is still time before the self directed Solo 401 k deadline.
When Is the Self Directed Solo 401 k Deadline?
Solo 401k rules stated that in order to qualify for contributions that year, the plan needs to be set up by the end of the year. That means to qualify for contributions in 2015; plan owners have until December 31, 2015 to set up the plan.
Even if the Solo 401k plan is set up on the last day of the year, plan participants can still make contributions for 2015. Usually, plan participants have until the tax-filing deadline to make contributions. For 2015, that means plan owners have until April 15, 2016 to contribute to the plan.
Why Contribute to a Solo 401k?
With proper planning, small business owners and self employed individuals can avoid headaches when tax season comes. Many people tend to wait until tax season to think about tax-saving strategies, but it may be too late then.
Having a Solo 401k account can be a wise tax-planning strategy. With a Solo 401k account, plan owners can shelter up to $59,000 a year into a tax-deferred account. This immediately lowers their taxable income by up to $59,000 for the year, which amounts to a sizable tax saving.
Once the money is contributed, plan participants can direct their investments without a custodian, thanks to the Checkbook Control feature. With the right investments, the fund can grow uninterruptedly on a tax-deferral basis.
Meeting the Solo 401 k Deadline
With the deadline approaching, it is important for small business owners and self employed individuals to take action quickly. A good Solo 401k plan provider should be able to answer all questions and provide necessary guidance to speed up the process.
Contact us today to learn how to set up a Solo 401k to qualify for contributions in 2015. Our retirement planning experts are available for any urgent inquiry at (949) 228-9394.
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