Frequently Asked Questions

Self Directed 401k

What is a self-directed 401(k) such as The QRP?

A self-directed 401(k) is technically no different than any other 401(k). It’s unique because of the available investment options. Most custodians only allow approved stocks, bonds, mutual funds and CDs. A truly self-directed 401(k) allows those types of investments PLUS specific gold and silver, real estate, notes, private placements, tax…Click for more

Setting up an eQRP

What types of businesses can set up Qualified Retirement Plans?

Sole Proprietorship, C Corporation, S Corporation, Partnership, Limited Liability Corporation (LLC), Limited Liability Partnership (LLP), and Not for Profit 501(c)(3).

QRP Maintenance

What is a 990T?

It’s the form to report Unrelated Business Income Tax. If your QRP had active income that was taxed you would likely use this form.

Contributions

Do you need profits in order to make contributions to a Profit-Sharing Plan?

NO. Of course having profit would probably make it easier to actually contribute something however, contribution to a profit sharing plan is discretionary. There is no set amount of profits that you need to make to contribute to profit-sharing plans.

Contributions

I have a Corporation and pay myself $30,000 annual salary.What is the maximum amount I can contribute to my plan?

$25,000 which is a combination of elective deferral, $7,500 in profit sharing (25% x $30,000).

Rollover

I own stocks and bonds and a IRA and want to rollover to QRP; do I need to sell the stocks or can I roll them over to the QRP?

You do not have to sell….you simply call the current custodian of the assets and inquire into their procedure for doing a rollover into your new plan, your eQRP.

Using the eQRP

When do I pay taxes on deferred income that I’ve contributed to my QRP?

You’ll pay taxes at your current income tax rate, which is determined by all income, including distribution income in the year that it’s taken. Any portion of elective contributions identified to be ROTH (after tax contributions) will normally not have any tax owed, if distributions are done after age 59…Click for more

Using the eQRP

What happens if I want to operate my business as a sole proprietorship now and then form an LLC or corporation later? Can I still use my old plan in the new LLC or Corp?

YES, that’s an option. There is a 2 page adoption agreement that can be prepared for you. Your new LLC or corp can start making tax deductible contributions to the old plan just like you did before. This is complimentary at Total Control Financial for our customers.

Total Control Financial