As founding CEO and manager of Advisory Group Associates’ Tax & Advisory firms, Frank L. Zerjav, CPA, leads a team of experienced Professional Tax Associates to provide strategic Tax & Business planning, Tax Return preparation and accounting services to clients nationwide. Frank Zerjav Sr., CPA, draws on over four decades of experience and is well equipped to advise business and real estate owners, professionals, Investors and individuals on the unique tax benefit
opportunities, such as solo 401(k) retirement plans.
For self-employed individuals, a solo 401(k) can be an extremely beneficial asset for retirement planning. A traditional 401(k) plan offers employees the option of making elective contributions from their monthly salaries to a tax-deferred savings account, with employers often matching their contributions up to a certain percentage. A solo 401(k) allows entrepreneurs to fill both roles, deferring up to $18,000 from their own salaries and adding an additional employer contribution up to 25 percent. In addition, workers over the age of 50 have the option of depositing an annual catch-up contribution of $6,000. It is worth noting, however, that entrepreneurs with non-incorporated businesses must comply with a 20 percent compensation cap rather than the traditional 25 percent.
This savings structure offers a great deal of flexibility for self-employed individuals, as a solo 401(k)’s employer contributions are optional and may fluctuate based on your business’ yearly performance. Many solo 401(k) plans also offer account holders the option of taking out loans or making a hardship withdrawal.