Any business structure is eligible to open and contribute to a solo 401k plan as long as they meet the basic eligibility rules, and that includes multi-member LLCs. To qualify, you must have any form of business, side hustle, or self-employment income and no employees, including part-time employees who have reached 21 years of age, […]
In 1999, Peter Thiel bought 1.7 million “founder’s shares” of PayPal for $1,700 with his Roth IRA. Within three years, PayPal went public and was acquired by eBay. His initial $1,700 investment turned into $28.5 million. Peter then used that money to make further investments from within his Roth IRA. He invested $500,000 into Facebook, […]
A solo 401k plan is a 401k designed for individuals. Rather than your employer sponsoring the plan for you, if you want access to the tax benefits a solo 401k gives you, you’re responsible for setting up a plan for yourself. There are many solo 401k plan providers out there, each one offering different features […]
If you’re required to make estimated tax payments to the IRS, taxes are due four times per year. If you missed a quarterly tax payment, the IRS will charge you with an underpayment penalty for not paying enough or not paying on time (even if you’re owed a tax refund). The penalty charged is not […]
What are quarterly tax payments? The United States’ tax system operates on a pay-as-you-go basis, meaning you must pay taxes as you earn or receive income during the year. There are two ways to pay as you go: Because most W-2 income earners have their taxes withheld and only have to pay attention to their […]
OVERVIEW What is a 60 day rollover? A 60 day rollover is another name for an indirect rollover. When you’re rolling over funds from one retirement plan to another, you get the option to choose between a direct rollover and an indirect rollover. Because of the 60-day period, an indirect rollover is also known as […]
For the 2023 tax year, the tax rates are the same as previous years with seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. You can determine your tax bracket using your taxable income and tax filing status. Overview of tax brackets for 2023 For taxes due in April 2024 Tax Rate […]
Normally, when you take an early distribution from your 401k plan, before the eligible withdrawal age of 59½, you’re required to pay a 10% penalty plus income taxes on your withdrawal. For example, if you’re under the age of 59½ and take a distribution of $20,000, you’ll be required to pay $2,000 as an early […]
Most retirement plans require that you start taking distributions once you reach the age of 73. You must withdraw at least the minimum amount each year, until your account is emptied. A Roth IRA has no RMD rules for the account owner, and you can keep your money compounding tax-free in your account as long […]
