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DEADLINE TO ESTABLISH A SOLO 401K Plan Is… December 31

* * * *

Solo plans must be signed and dated prior to December 31 to be in place for the current year.

 Please contact  PATA if you have any questions.

SOLO 401K

 Thanks to the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) small businesses (whose only employee is the owner) can open and contribute to a self-employed 401K plan.  Finally, a great tax break strictly geared to benefit the smallest business owners!  On top of the tax break, the self-employed 401K offers other benefits for small business owners. 

PATA is in the business of establishing and maintaining retirement plans, has been since 1983.  The Solo plan is a straightforward plan for the individual who has no eligible employees besides his/herself.  It allows for larger annual retirement plan contributions than the SEP or traditional profit sharing plan.   It is in PATA's eyes a great plan for the owner only business.  

PATA’s SOLO 401K plan features…  

• Loans are allowed… up to $50,000 or 50% of your vested balance
  
  
• Accepts Rollovers… Consolidate your retirement funds into one plan, rollover investments from other plans and IRAs 

• Contribution flexibility… You decide what to contribute each year, if anything!! A 401k plan is a profit sharing plan.  Profit sharing plans do not have a mandatory contribution requirement.  You can contribute anything from 0% to 25% of your compensation.
  - Deferral deadline: Deferrals must be deposited prior to December 31.
  - Employer contribution deadline: The maximum 25% employer contribution must be deposited prior to filing the business’ tax return.
  
  
• No annual filing requirement... If the total plan assets are less than $250,000 (including contributions that may be receivable at year end) then the IRS gives you a "BYE" with regarding to filing the necessary form 5500 and schedules
  
  
• Investments… Many plan sponsors are using PATA to establish a Solo plan because it is possible to use any investment option available…  Vanguard, American Funds, Schwab, Merrill Lynch etc.   With PATA’s document you can invest in pension suitable investments on your own or use your existing personal financial planner.  PATA and the document that PATA uses has no affiliation with any investment firm allowing the plan sponsor to invest the plan’s assets wherever s/he feels fit.
  
  
• Inexpensive to establish and maintain… Because PATA is not affiliated with any fund family or investment house, there is a fee to establish a Solo401k plan (not that a large mutual fund will not charge a setup fee).  The fee is a one-time fee and is more often than not less expensive than other plans out there.  Once the plan is established there is an annual document fee that keeps the plan in compliance with the tax code pertaining to retirement plans. 

The Document…

The Plan Document that PATA uses is an IRS approved Volume Submitter (prototype format) document.  An approved  document has been reviewed by the IRS and determined to be compliant with the IRS code governing pension plans.  The benefit of the document PATA uses is that if the IRS decides to amend the IRS code governing pension plans, your plan will automatically be covered!   For this service, there is an annual document usage fee of $150/year.  It is a fee paid to the document company invoiced through PATA.  Unless you have an annual administration performed that $150 fee would be all it will cost to maintain your plan from year to year! 

How to Establish a Solo…. 

To establish a Solo for a one-time low cost setup fee of $350*, click on the “Sign-Up” package below, complete the forms and forward them to PATA with payment.  That’s it! 

If you would like to make your payment for the establishment of the plan simply use the Paypal “BUY NOW” button.  The cost is slightly higher but the payment is sent quickly and securely!  You can then email or fax the signup form  indicating that you have made payment by putting the “transaction ID” in the upper right hand corner of the form.  Once all has been verified your plan will be generated and emailed back to you via email in pdf format to be signed. 

NOTE:  The signature page for the adoption agreement (the plan) will be forwarded to you once the sign-up package and payment has been received and processed.  PATA will date the signature page and email it (or return to you via US Mail) back for the trustees to sign.  The plan will be considered "Established" when the sign-up package was received by PATA.

Contributions you intend to make to the plan are due by the time you file your taxes. 

Investing your plan’s assets… 

The benefit of establishing your Solo through PATA is that you can invest your contributions wherever you want!  You are not locked into investing in the funds of the company you established your plan through.  You can use your present broker**, invest on your own, or decide later how you want to manage the assets of your newly established Solo 401(k) plan. 

In addition…

PATA prides itself on personal timely service!   No calling a large mutual fund company and talking to a new person each time.  

Miscellaneous…. 

SEP or SOLO 401(k) plan… click here to see some differences  

Existing plans with more than $250,000 in assets…..  

~Do you have a plan that has assets greater than $250k

~Need a quick and easy admin that includes the 5500s completed? 

PATA can help you file your Solo plan’s form 5500 and help you calculate the maximum allowable contribution. 

* In addition to the one time fee, there is an annual document fee of $150 to keep the plan document in compliance with IRS regulations. This fee will commence with the second year the plan is in effect.

** If you do not have an established relationship with a financial advisor it is easy to establish an account on your own.  If you need a licensed financial advisor to get started, PATA can assist you there as well.