Uncle Sam Gives Self-Employed Professionals a Holiday Gift – The Solo (k)

PENSCO Trust Offers an Easy Way to Start a Solo (k)

SAN FRANCISCO–(BUSINESS WIRE)–Thanks to Uncle Sam’s new Solo (k) retirement account, (http://www.pensco.com/account/solok.asp) small business owners have a better way to build wealth – without the income restrictions imposed on Roth IRAs.

With the new Solo (k), (http://www.pensco.com/account/solok.asp) and Roth component, solo practitioners and husband-and-wife-owned businesses get tax-free growth, the ability to borrow from their account and more choices of investments. And there’s still time to set up a Solo (k) (http://www.pensco.com/account/solok.asp) retirement plan for 2006 – simply complete the plan documents before December 31 and fund it later.

PENSCO Trust Company (http://www.penscotrust.com), a special asset custodian for self-directed IRAs and Solo (k)s, has opened over 40 accounts in the last two weeks. Tom Anderson, president and CEO of PENSCO Trust, says the reason for the surge of volume is simple, “Savvy investors are discovering the new tax benefits afforded by the Solo (k) and are taking control of their retirement.”

As a small business owner you can contribute up to 25% of earnings for a maximum of $44,000 to a SEP/IRA in 2006. But when you take the same contribution, plus an additional $5,000 for those over 50, and open a Solo (k) instead, you get new investment flexibility and tax advantages not available through IRAs and SEP/IRAs. In most cases, your Solo (k) contributions are tax-deductible and grow tax-deferred. With the possibility of contributing up to $15,000 on an after-tax basis through a Solo (k), regardless of your income (unlike the Roth IRA), small business owners can now enjoy the benefits of building wealth through tax-free savings.

Have you missed out on the Roth IRA because you made too much money? Well, now you can get Roth benefits and more with a Solo (k).

Big Benefits with the Solo (k)

If you are self-employed and have no employees (other than a spouse) or part-time employees that work less than 1,000 hours per year, consider opening a Solo (k). Whether you’re operating as a sole proprietor, C Corporation, LLC or Subchapter S Corporation, you will get these benefits:

  • No income limitations on contributions, so regardless of your income, you can maximize your contribution with the Roth component
  • You can avoid UBIT (Unrelated Business Income Tax) on debt-financed investment properties
  • You can buy life insurance
  • You can borrow from your plan, up to $50,000 or 50% of the plan assets
  • You can contribute to both a Roth IRA and a Solo (k) as long as you earned $110,000 or less Adjusted Gross Income, filing singly.

For more information on beating the 12/31/06 paperwork deadline for a 2006 Solo (k) account or for a comprehensive list of traditional IRA, SEP and Solo (k) contribution deadlines, call 866-818-4472.

About PENSCO Trust Company

Established in 1989, PENSCO Trust Company is the country’s only single-service special asset custodian for self-directed IRAs, with over $1.8 billion in real estate and private placement assets under administration. PENSCO Trust, a passive custodian, sells no products nor gives investment advice.