How to Maintain your Solo 401k

Updated : Oct 17, 2019 in Articles

How to Maintain your Solo 401k

I’m Mat Sorensen here with my law partner
Mark Kohler ready to talk to you about how to maintain your solo 401k now this
is an important topic I want to commend you for watching the video oh I got to
maintain this thing I know you wanted to avoid this video no listen to this
there’s a there’s a lot of critics out there that don’t like what we’re doing
setting up solo or Oh in case for self directing because they argue we’re
giving really a loaded handgun to a child that’s the equivalent because this
financial instrument of 401 K is dangerous you can screw it up and if
you’ve got to have some maintenance to to really protect yourself from problems
with the IRS yeah and to us it’s a really valuable tool just gotta know how
to take care of it you know you polish the gun everybody you know say no more
I’m gonna run this analogy but you know we’re saying okay take care of it
alright and let’s hit a couple things we want to make sure you do first
you gotta have an accounting of it you got to have some records of what the
heck’s going on in it did I put money in it did I take money out of it what
investments do I have okay you don’t have a folder with a bunch of crap
you’ve put in it all right you need an accounting of that that’s what directed
IRA does for you with our solo 401 k’s you have a count log in we get quarterly
statements we update your account from the information you provide us now that
information you’re gonna provide really comes from a checkbook this is what we
want everybody to do and they get their 401 k package is go down to the bank and
set up a checkbook which if you’re on a DIY plan setting up your 401 K you can
go down to the bank and run into some roadblocks because you’re not sure what
to say you might want to take a tent and sleeping bag cuz you’re gonna be there
for a while yeah with with our work full support 401 K set up we’re gonna help
walk you through some techniques to help get through the banking process you got
to have a checkbook yeah and that checkbook is going to be the foundation
of your record-keeping to document what you put in what you take out and give
that to our a more directed IRA maintenance plan it’s like 300 bucks a
year very affordable and they’re gonna help give you the reports and online
access anytime you know it’s there ya know number two make sure you don’t
screw it up by committing a prohibited transaction do you know the primitive
transaction are you transacting with yourself or
certain family members who are prohibited to the account we want to
make sure you understand those rules because that is where you could really
cause a problem for your retirement account penalties possible excise taxes
yeah yeah and when you set up a 401k you should be getting from your provider
whoever helped you what we give our clients as a binder lots of reading
material some extra videos and that consultation when they need it and if
you didn’t set up your 401k with us it’s okay call our tax lawyers just all a
card us for 20 minutes here a half hour there maybe once a year have a little
planning session to talk about what you’re doing in your 401k so you don’t
step on a landmine yeah now one other key thing if you got over 250 thousand
of assets in the solo 401k tax return you have to file what’s called a 5500
easy for the solo 401k if you’re under that there’s no tax reporting for the
solo 401k itself you may be reporting your contributions or have some tax
reporting stuff you got to take care of if you’re rolling over transferring
funds into it but the plan itself does not have to file its own tax return
until you’re at 250 thousand of assets I’m gonna throw one last you know
problem and that is if you have multiple accounts within the 401k say your spouse
is contributed say you’ve got kids involved say you have Roth pieces in
traditional pieces think of the 401k like a honeycomb and you’ve got all
these little accounts within the 401k you gotta track as well so you can see
where a good little accounting support system would be important about that
service check down below but in other videos on this where we talk about the
Roth 401k peas so lots of lots of things lots of opportunity but it comes with
some responsibilities yeah and there’s a lot of detail on the plan binder of our
401ks on how to track that how to count for what the rules are of course my
chapter in my book the self-directed IRA handbook has a whole chapter I can’t
leave I knew he’d plug his back I knew he’d plug his book in this video so
there’s just if there was a but a better book I would tell you okay that’s true
so get over to self-directed IRA handbook calm SPT IRA handbook calm
that’s where you get a copy amounts but second edition mind you so it’s pretty
good I’m being book shamed right now I have a chapter on this in my book as
well but apparently it’s not as good as who but try
no anyway lots of fun here we hope you are enjoying your 401 K ride just buckle
up all the rules keep your hands and arms in there all times and you’re going
to love the right thanks so much for watching that video and I want to be
your source for tax and legal strategies it’s hard enough to live the American
dream without being out on the web on Google trying to find answers to complex
questions and just click in a mouse hoping you got it right my team and I
want to be a huge resource treatment the law firm accounting firm by education
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1 Comment

  • The only folks worried about solo 401k's are the brokers who are NOT making commissions and transactions fees………….

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