ROBS 401(k)

Solo 401(k)

IRA LLC

• For entrepreneurs who want to use their retirement funds to finance their existing or new business tax and penalty free.
• The business owner(s) can draw a fair salary.
• SBA Loans and bank loans can also be incorporated.

• Allows for 401k loan and investing in alternative investments such as real estate, metals and notes.
• Allows for after-tax solo 401(k) contributions as well as Roth 401k contributions.
• Investments can be made by writing a check or by wire.
• The solo 401(k) owner serves as trustee and thus makes all investment decisions.
• The solo 401k  owner chooses where to hold the solo 401k funds.
• Both spouses can participate in the same solo 401(k) plan.

• For those who do not qualify for a solo 401(k) but still want to invest in real estate.
• The LLC manager controls the funds and places investments by check or wire.
• Greatly limits IRA custodian fees and investments can be placed more quickly since the LLC manager places the investments.

• Any business setup as a C-Corporation that offers goods or services.

• Owner-only businesses including both spouses with no common-law employees.
• Contractors.

• Individuals who have earned income.

•  Employees can choose to participate if they’re 21, have worked one year and 1,000 hours.

• No full-time common-law employees. Otherwise, no age or service restrictions.

• None

Funding responsibility

• Once plan eligibility has been met, employee salary reduction contributions and/or employer contributions.

• None. Business owners can contribute as employer and/or employee.

• None. IRA holder can make contributions from W-2 income or earned income.

• Employer can decide whether or not to make profit sharing contributions from year to year.

• Business owner can contribute as employer and/or employee.

• IRA holder can make contributions from W-2 income or earned income.

• For the 2022 tax years, up to 25% of the participant’s compensation or a maximum of $61,000, whichever is less.
• Contributions are deductible as a business expense and aren’t required every year.

• For the 2022 tax year, overall employer plus employee contribution limit is 100% of compensation with a maximum of $61,000

• None

• $20,500 for the 2022 tax year ($27,000 for employees age 50 or older).
• Contributions are not required each year but discrimination testing may apply.

• $20,500 for the 2022 tax year ($27,000 for employees age 50 or older).
• Contributions are not required each year.

• For tax year 2022, $6,000 or $7,000 if age 50 or older.

• Employer stock

• Alternative investments such as real estate, metals, notes, and tax liens to name a few. Equities such as mutual funds and stocks.

• Alternative investments such as real estate, metals, notes, and tax liens to name a few. Equities such as mutual funds and stocks.

• Certain distribution triggering events apply (e.g., retirement, age 59 1/2, in-service of rollover funds). Federal income taxes and a possible 10% penalty if the participant is under age 59½.
• Allows for 401k participant loans.

• Certain distribution triggering events apply (e.g., retirement, age 59 1/2, in-service of rollover funds). Federal income taxes and a possible 10% penalty if the participant is under age 59½.
• Allows for solo 401k participant loans.

• Can’t take  loans but can take distributions prior to reaching age 59 1/2, but federal taxes apply as well as a 10% early distribution penalty if under age 59 1/2.

• Must adopt a plan that allows for investing in employer securities.
• IRS reporting required, such as Form 5500.

• Must adopt a plan that allows for investing in alternative investments.
• IRS reporting required, such as Form 5500-EZ once plan asset value reaches $250,000.

• Provide total value of LLC to IRA custodian for issuance of Form 5498.