Sep 29

You Have Until October 1 to Set-up a SIMPLE IRA

If you are a small business owner and are looking to have a retirement plan, a SIMPLE IRA is a great option.  Act quick though, Wednesday, October 1, is the deadline for opening a new plan for the year.  There are lots of advantages of the SIMPLE IRA for both you and your employees.

A SIMPLE IRA is a great retirement plan for small businessesThe SIMPLE IRA, aka the Savings Incentive Match Plans for Employees IRA, is in a word, simple, both to set up and to operate.  This gives you, as a business owner, the ability to offer a qualified retirement plan to your employees for little hassle and modest contributions.  Note that this plan is only available to businesses with less than 100 employees who earned at least $5,000 compensation during the last year.

If you’ve ever contributed to a 401(k) plan, you basically know how the SIMPLE plan works.  Your employees contribute to the plan (up to $12,000 or $14,500 if you are 50+ years old for 2014) and you make contributions for each eligible employee in one of two ways.  First, you may choose a dollar for dollar matching contribution up to 3% of each employees’ compensation.  For example, an employee who earns $50,000 and contributes $5,000 will receive $1,500 from you.  If you are having a down year, you may contribute less than 3%, but may only do that twice within five years.  The other option is a non-elective contribution of 2% (no matter if the employee contributes to the plan or not).  That same $50,000 employee who makes no contribution would receive $1,000 from you in this example.

SIMPLE IRAs offer many advantages over other qualified plans.  There’s no annual reporting to the government if you use a SIMPLE IRA.  It’s also much easier to budget with this plan.  If you choose the non-elective contribution, you know your contributions will be 2% of your employees’ payroll.  It may be smaller with the 3% option since you don’t contribute to employees who don’t contribute to the plan.  You have no fiduciary exposure since employees manage their own investments.  Further, you can choose a plan that allows the employees to choose his or her own financial institutions.

The major drawback is that you cannot contribute as much as you can to other qualified plans like a 401(k) or SEP IRA.  As mentioned, you must set up the plan by October 1 for the current year.  If you have the plan previously, to use one for the current year must be done by January 1 for that year.

A SIMPLE plan is just one great option for small business owners who want to set up a retirement account for their employees.  You might look into a SEP IRA as well.  You have until October 15 to set one of those up for your business for the current year.  If you have any questions or are looking to set up a plan for your small business, contact one of the tax experts at the IRA Financial Group @ 800.472.0646 now!

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Sep 26

How to Use Your IRA Funds to Buy a Business

Leaving your job or thinking of leaving your job and have an IRA or 401(k) qualified retirement plan? Why not use your IRA or 401(k) Plan to invest in yourself instead of a falling stock market? Why put your hard earned retirement funds in the hands of Wall Street when you can use your 401(k) funds on a business you can run, manage, and even earn a salary from?

How to Use My IRA Funds to Buy a BusinessWith IRA Financial Group’s Business Acquisition structure, a new C Corporation is formed which will adopt a 401(k) Qualified Plan. Your existing retirement funds can then be rolled into the newly adopted 401(k) Plan tax-free. The 401(k) Plan will then purchase the stock of the new corporation. The new corporation will then use those funds to purchase a new business or franchise tax-free!

With the IRS compliant Business Acquisition Structure, you can earn a reasonable salary from your new business or franchise. You can also use your new 401(k) Plan to make high tax-deductible contributions – $52,000 ($57,500 if you are over the age of 50) or even borrow up to $50,000 for any purpose.

What does the IRS Say about this?

The Internal revenue Code explicitly permits the purchase of corporate stock by a 401(k) Qualified Plan. The IRS has repeatedly confirmed that the structure is legal but has expressed some concern about the potential for abuse by individuals not being properly advised by tax professionals. For example, the IRS has documented the following instances of abuse when it comes to using retirement funds to invest in a business: (i) employees of the business are not properly informed that a 401(k) qualified plan has been adopted by the business and that they are eligible to participate, (ii) the structure is established with no intention to use for business purpose and the sole purpose for establishment was to get access to the retirement funds without penalty, or (iii) the structure is being used to purchase assets for personal use with the retirement funds.

Therefore, the IRS has stressed that it is imperative that when using IRA or 401(k) funds to establish a new business or finance an existing one, it is important to work with qualified tax professionals who have experience in this area and could make sure the structure is established in full compliance with IRS and ERISA rules and procedures. Work with IRA Financial Group’s in-house tax professionals to help establish your IRS compliant Business Acquisition Solution.

IRA Financial Group’s Business Acquisition structure is IRS compliant and is the only legal structure that one can use to invest retirement funds into a business they will operate and be employed by. With a self-directed IRA LLC, an individual can invest retirement funds in a private business, but not a business that he or she would be involved in – that would be considered a prohibited transaction pursuant to Internal Revenue Code 4975. While, with a Solo 401K, an individual could only borrow up to $50,000 or 50% of his or her account value whichever is less and use that loan for any purpose, including starting or financing a business. However, if an individual requires more than $50,000 for a business, then the Business Acquisition structure is the only solution that will allow one to use their retirement funds to start or finance a business tax-free and without penalty!

To learn more about the advantages of using a Business Acquisition Structure to start or finance a business using retirement funds, please contact a retirement expert at 800-472-0646.

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Sep 25

IRA Financial Group Introduces New User Data Technology Security Solutions for Self-Directed IRA Clients

Enhanced encryption security features to provide self-directed IRA clients with heightened data security.

The IRA Financial Group, the leading provider of self-directed IRAs with checkbook control introduces a new enhanced technology security solution for the over 8000 self-directed IRA clients. IRA Financial Group is committed to offering our self-directed IRA clients enhanced security features to help protect their confidential retirement account information. “We are excited to introducing a new proactive encryption security solutions designed to provide our self-directed IRA clients with protection for their valuable data in the face of new and increasingly sophisticated end user security threats, “ stated Adam Bergman, a tax partner. According to Mr. Bergman, client data security is no longer solely the concern of just large enterprises, it is critical that the retirement account data for our over 8000 clients be 10% protected for a security breach.

IRA Financial Group Introduces New User Data Technology Security Solutions for Self-Directed IRA Clients IRA Financial Group in combination with a number of leading IT security firms have developed a seamless enhanced security process for transferring client account data with full data encryption features that delivers proactive protection against the daily threat of malware and various other online security threats. IRA Financial Group is responsible for establishing self-directed IRA LLC clients for retirement account investors across the country and it is vital that all client confidential data and financial information be well protected against any potential security threat. “Our clients trust us to establish their IRS compliant self-directed IRA LLC structure and we take our job extremely seriously, especially when it comes to protecting our client’s user data, “ stated Mr. Bergman.

IRA Financial Group’s Self-Directed IRA LLC, is an IRS approved structure that allows one to use their retirement funds to make real estate and other investments tax-free and without custodian consent. The Self-Directed IRA LLC involves the establishment of a limited liability company (“LLC”) that is owned by the IRA (care of the IRA custodian) and managed by the IRA holder or any third-party. As manager of the IRA LLC, the IRA owner will have control over the IRA assets to make traditional as well as non-traditional investments, such as real estate from a local bank without tax or penalty.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market’s leading “checkbook control” Self Directed IRA and Solo 401(k) Plan provider. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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Sep 23

The SEP IRA Solution

What is a SEP?

A SEP is a simplified employee pension plan. Any employer can establish a SEP. An employer can maintain both a SEP and another plan. Annual contributions an employer makes to an employee’s SEP-IRA cannot exceed the lesser of (i) 25% of compensation, or $50,000 for 2014. However, special rules apply when figuring out the maximum deductible contribution for a self-employed individual (typically 20% of compensation).

What is a SEP Self-Directed IRA LLC?

A Self Directed SEP IRA LLC “Checkbook Control” structure is an IRS approved and Tax Court certified structure that offers one the ability to use his or her SEP IRA funds to make almost any type of investment on their own without requiring the consent of any custodian. Tired of being forced to invest in stocks or mutual funds? Have an investment opportunity, such as real estate or a business investment that you would love to make with your SEP IRA funds… then the Self Directed SEP IRA LLC is your solution.

By gaining “checkbook control” over your SEP IRA funds you will gain the following advantages:

“Checkbook Control”: You will no longer have to get each investment approved by the custodian of your account. Instead, as manager of the SEP self directed IRA LLC, all decisions are truly yours. To make an investment, simply right a check and use the funds straight from your Self Directed SEP IRA LLC bank account.

The SEP Self-Directed IRA LLC SolutionFor example, Jen, who is self-employed, has established a SEP Self Directed IRA LLC. Jen’s SEP IRA care of the custodian is the sole member of the LLC and Jen will be appointed as manager of the LLC. Jen has opened her Self Directed SEP IRA LLC bank account at a local bank. The name of Jen’s Self-Directed SEP IRA LLC is ABC LLC. Jen wishes to use her IRA funds to purchase a home from Jack, an unrelated third-party (non-disqualified person). Jack is anxious to close the transaction as soon as possible. With a “checkbook control” Self Directed SEP IRA LLC, Jen, as manager of the LLC, can simply write a check using the funds from the ABC LLC bank account or can wire the funds directly from the account to Jack. Jen, as manager of the LLC, no longer needs to seek the consent of the custodian before making the real estate purchase. With a regular Self Directed IRA without “checkbook control”, Jen would likely not be able to make the real estate purchase since seeking custodian approval would have likely taken too much time.

Investment Opportunities: With a Self-Directed SEP IRA LLC, you will be able to invest in almost any type of investment opportunity that you discover, including: real estate (rentals, foreclosures, raw land, tax liens etc.), private businesses, precious metals, hard money & peer to peer lending as well as stock and mutual funds; you’re only limit is your imagination. The income and gains from these investments will flow back into your SEP IRA tax-free.

Low Custodian Fees: A Self-Directed SEP IRA LLC “Checkbook Control” structure will help you save a significant amount of money on custodian fees. With a Self Directed SEP IRA LLC with “checkbook control” you no longer have to pay excessive custodian fees based on account value and transaction fees. Instead, with a “checkbook control” Self-Directed SEP IRA LLC, an FDIC backed IRS approved passive custodian is used.

The custodian in the “checkbook control” Self Directed SEP IRA LLC structure is referred to as a “passive” custodian largely because the custodian is not required to approve any SEP IRA related investment and simply serves the role of satisfying IRS regulations. By using a Self Directed SEP IRA LLC with “checkbook control” you can take advantage of all the benefits of self-directing your retirement assets without incurring excessive custodian fees and custodian created delays.

All the Passive Custodians we work with are FDIC backed and IRS approved. Once your custodian has transferred your retirement funds to the IRA Passive Custodian, the IRA Passive Custodian will immediately transfer your funds to your new SEP IRA LLC which can be opened at any local bank, where you as manager of the SEP IRA LLC will have “Checkbook Control” over those funds.

Investments Made Quickly: With a Self-Directed SEP IRA LLC “Checkbook Control” structure, you will have the power to act quickly on a potential investment opportunity. When you find an investment that you want to make with your SEP IRA funds, as manager of the SEP IRA LLC, simply write a check or wire the funds straight from your Self Directed SEP IRA LLC bank account to make the investment. The Self Directed SEP IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Tax-Free Gains: With the Self-Directed SEP IRA LLC “Checkbook Control” structure, all income and gains from the SEP IRA investments will generally flow back to your SEP IRA LLC tax-free. Because an LLC is treated as a pass-through entity for federal income tax purposes and the SEP IRA, as the member of the LLC, is a tax-exempt party pursuant to Internal Revenue Code Section 408, all income and gains of the LLC will flow-through to the IRA tax-free!

Direct Access: With a Self-Directed SEP IRA LLC “Checkbook Control” structure, you, as manager of the SEP IRA LLC, will have direct access to your SEP IRA funds allowing you to make an investment quickly and efficiently. There is no need to obtain approvals from your custodian, or deal with time delays in awaiting approval from your custodian or paying any review fees.

Limited Liability: By using a Self-Directed SEP IRA LLC with “Checkbook Control”, your SEP IRA will benefit from the limited liability protection afforded by using an LLC. By using an LLC, all your SEP IRA assets held outside the LLC will be shielded from attack. This is especially important in the case of SEP IRA real estate investments where many state statutes impose an extended statute of limitation for claims arising from defects in the design or construction of improvements to real estate.

Asset & Creditor Protection: By using a Self-Directed SEP IRA LLC with “Checkbook Control”, the SEP IRA holder’s IRA will be protected for up to $1 million in the case of personal bankruptcy. In addition, most states will shield a Self Directed SEP IRA from creditors attack against the IRA holder outside of bankruptcy. Therefore, by using a Self-Directed SEP IRA LLC, the IRA will be generally protected against creditor attack against the SEP IRA holder.

To learn more about the Self Directed SEP IRA LLC solution, contact one of our SEP IRA Experts at 800-472-0646 today!

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Sep 22

3 Things to Know About a Self-Directed IRA

Here’s fool.com‘s Dan Caplinger giving you three good reasons to invest in a Self-Directed IRA:

Tax-favored retirement accounts are an important part of your retirement savings strategy, and IRAs are the most flexible of the options at your disposal. In some sense, every IRA is self-directed in that you have the opportunity to buy whatever stocks, bonds, mutual funds, ETFs, and other investments that your provider will give you. That makes IRAs more attractive to many investors than 401(k) plans, which only offer a limited menu of investment choices.

Yet the term “self-directed IRA” more commonly refers to a retirement account with even more investment alternatives available than a typical IRA. A self-directed IRA isn’t as easy to find as its run-of-the-mill counterpart, but it can offer advantages that regular IRA investors don’t have. Let’s look at three things you need to know about the self-directed IRA to decide whether it’s the right retirement account for you.

1. A self-directed IRA lets you go beyond securities like stocks and funds

Brokers always tout the extent to which you can diversify your IRA portfolio, choosing from thousands of stocks, funds, and other publicly available investments to achieve exposure to almost any asset class you want. Given the breadth of offerings in the exchange-traded fund arena alone, many IRA participants are content to use regular IRAs for their retirement investments.

But the rules governing IRAs offer much more latitude to hold other investments beyond these securities, and that’s the primary reason why self-directed IRAs were created. In particular, self-directed IRAs can own specific parcels of real estate, ranging from raw land to homes and commercial property. In addition, a self-directed IRA can include privately held business interests such as partnerships or limited liability companies.

Those types of assets are extremely appealing to many investors, especially those looking to take advantage of their knowledge of their local area. With locally owned businesses or nearby real estate, retirement savers often feel they have an edge over other investors because of their knowledge of that specific market. In addition, investors can feel a true connection with their investments, which, to many, is more attractive than sending money to Wall Street to be sent around the world.

2. Tax laws limit certain investments and transactions, and if you break the rules, your whole IRA is at risk

A self-directed IRA lets you invest in things that regular IRAs don’t, but even self-directed IRAs have limitations. The Internal Revenue Service follows a sophisticated set of rules that prevent IRA owners from engaging in self-dealing or other prohibited transactions with their IRA assets.

Most of the prohibited transaction rules address simple situations. For instance, you can’t sell property to your IRA or buy property from it. You can’t draw personal loans against your IRA assets. You can’t live in a home or other property that your IRA owns. And you can’t use any IRA property for personal use. Similarly, if you own or have a leadership position within a privately held business, your IRA invest can’t in that company, either through buying shares of stock or by extending a loan to the business.

Self-dealing also extends to family members, including your spouse, parents, and grandparents, as well as children and grandchildren and their respective spouses. You also can’t get around self-dealing laws by hiring individuals such as financial planners or accountants to work on your behalf, as they’re treated as disqualified people as well.

If you engage in a prohibited transaction, the initial tax is 15% of the amount involved. But if you don’t remedy the situation, an additional tax of 100% applies. It’s therefore imperative to avoid prohibited transactions at all costs, even when a self-directed IRA makes them seem possible.

3. Most brokers don’t offer self-directed IRAs

You won’t find self-directed IRAs at most well-known brokers, as the legal liability associated with being an IRA custodian introduces risks that the majority of brokers are uncomfortable taking. It’s easier for regulatory-compliance purposes for those brokers to deal with traditional investments rather than taking on the specific risk of overseeing nontraditional investments.

As a result, if you want a self-directed IRA, you’ll often have to go with brokers you may not have heard of, and their fees can be higher. Between the account opening fees, annual maintenance charges, and per-asset management fees, the total amount you pay for a self-directed IRA can add up to hundreds or even thousands of dollars annually. Therefore self-directed IRAs are best for those with substantial assets so that these fees don’t represent such a large percentage of their overall retirement nest egg. You should also do your due diligence to ensure that your self-directed IRA broker is legitimate, as regulators including the North American Securities Administrators Association and the SEC have seen rising levels of fraud associated with self-directed IRA providers.

Despite the challenges involved, a self-directed IRA can be a useful tool to expand the permissible range of your investment portfolio. So long as you know and manage the risks involved, a self-directed IRA can open up profit opportunities that most retirement savers can’t capture.

If You are looking to invest in just about anything, please contact the country’s leading Self-Directed IRA Provider, the IRA Financial Group, @ 800.472.0646!

Sep 19

IRA Financial Group Clients Invested Over $2.6 Billion Since 2010 in Real Estate Helping to Spur U.S. Real Estate Market

Over the last five years IRA Financial Group’s self-directed IRA and Solo 401(k) Plan investors have taken advantage of attractive real estate opportunities

IRA Financial Group, the leading provider of self-directed IRA LLC & Solo 401(k) plan solutions, announces that since 2010 its self-directed IRA and solo 401(k) plan clients have invested over $2.6 billion in real estate. “By using cash in their retirement funds, our clients have has great success in finding and closing on real estate transactions as well as taken advantage of the tax benefits of owning real estate in a retirement account, “ stated Adam Bergman, a tax partner with the IRA Financial Group. “We are proud that our self-directed IRA and Solo 401(k) plan clients have had a significant impact on the growth in the U.S. real estate markets,” stated Mr. Bergman.

The primary advantage of using a self directed IRA LLC or Solo 401(k) Plan to make investments is that the income and gains from the retirement account investment are tax-deferred or tax-free in the case of a Roth IRA or Roth Solo 401(k) Plan. In addition, with a self-directed IRA or Solo 401(k) plan, investments can be made by simply writing a check.

IRA Financial Group Clients Invested Over $2.6 Billion Since 2010 in Real Estate Helping to Spur U.S. Real Estate MarketWith IRA Financial Group’s self directed IRA LLC & Solo 401(k) Plan solutions, traditional IRA or Roth IRA funds can be used to buy real estate throughout the United States in a tax-deferred account by simply writing a check. “Even with real estate prices increasing, our clients have been able to find attractive real estate opportunities for their retirement account, “ stated Susan Glass, a tax specialist with the IRA Financial Group. “Of the over $2.6 billion that our self-directed retirement clients have invested in the last five years, the majority of the clients have seen their investments grow in value, something we are quite proud of, “ stated Mr. Bergman.

According to Mr. Bergman, “ IRA Financial Group’s Self-Directed IRA and Solo 401(k) Plan for real estate investors, also called a real estate IRA with checkbook control or a Self-Directed real estate 401(k) Plan, is an IRS approved structure that allows one to use their retirement funds to make real estate and other investments tax-free and without custodian consent. A Self-Directed IRA and Solo 401(k) Plan provides the retirement account holder with greater control over his or her retirement assets allowing the individual to make traditional as well as non-traditional investments, such as real estate tax-deferred and with much lower annual fees. “By using a “checkbook control” self-directed IRA LLC or Solo 401(k) Plan our clients have been able to make hundreds of millions of dollars in real estate purchases without incurring high IRA account fees, “ stated Mr. Bergman.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market’s leading “checkbook control Self Directed IRA and Solo 401(k) Plan provider. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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Sep 16

Transferring and Self-Directing Your SIMPLE IRA

Individuals may generally transfer IRA or rollover eligible qualified retirement plan assets into a self-directed IRA LLC structure. Individuals may also roll over after-tax retirement funds to a Self-Directed SIMPLE IRA.

What is the most Common Way to Fund a Self-Directed SIMPLE IRA ?

Transfers and rollovers are types of transactions that allow movements of assets between like IRAs – Traditional IRA to Traditional IRA, including Savings incentive match plan for employees of small employers (SIMPLE). An SIMPLE IRA transfer is the most common method of funding a Self-Directed SIMPLE IRA LLC.

Note – SIMPLE IRA assets may be rolled over to a Self-Directed SIMPLE IRA anytime, however, SIMPLE IRA assets may be rolled over to a 401(k) qualified retirement plan, 403(b) plan, governmental 457(b) plans or a Traditional IRA only after a two (2) year waiting period is met. Though, a 401(k) qualified retirement plan, 403(b) plan, or governmental 457(b) plan may not be rolled into a SIMPLE IRA. Also, a Roth IRA cannot be rolled into a SIMPLE IRA.

Rollover Chart

Click the image below to view the Rollover Chart.

IRA Rollover Chart

SIMPLE IRA Transfers to a Self-Directed IRA

A SIMPLE IRA-to SIMPLE IRA transfer is one of the most common methods of moving assets from a SIMPLE IRA to Self-Directed SIMPLE IRA LLC. A transfer usually occurs between two separate financial organizations, but a transfer may also occur between SIMPLE IRAs held at the same organization. If a SIMPLE IRA transfer is handled correctly the transfer is neither taxable nor reportable to the IRS. With a SIMPLE IRA transfer, the SIMPLE IRA holder directs the transfer, but does not actually receive the IRA assets. Instead, the transaction in completed by the distributing and receiving financial institutions. In sum, in order for the SIMPLE IRA transfer to be tax-free and penalty-free, the IRA holder must not receive the SIMPLE IRA funds in a transfer. Rather, the check must be made payable to the new IRA custodian. Also, there is no reporting or withholding to the IRS on an IRA transfer.

The retirement tax professionals at the IRA Financial Group will assist you fund your Self-Directed SIMPLE IRA LLC by transferring your current SIMPLE IRA funds to your new Self-Directed SIMPLE IRA structure tax-free and penalty-free.

How the SIMPLE IRA to Self-Directed IRA Transfer Works?

Your assigned retirement tax professional will work with you to establish a new Self-Directed SIMPLE IRA account at a new FDIC and IRS approved IRA custodian. The new custodian will then, with your consent, request the transfer of your SIMPLE IRA assets from your existing IRA custodian in a tax-free and penalty-free IRA transfer. Once the IRA funds are either transferred by wire or check tax-free to the new SIMPLE IRA custodian, the new custodian will be able to invest the SIMPLE IRA assets into the new SIMPLE IRA LLC “checkbook control” structure. Once the funds have been transferred to the new SIMPLE IRA LLC, you, as manager of the SIMPLE IRA LLC, you would have “checkbook control” over your retirement funds so you can make traditional as well as non-traditional investments tax-free and penalty-free.

60-Day Rollover Rule

An individual generally has sixty (60) days from receipt of the eligible rollover distribution from a SIMPLE IRA account to roll the funds into a Self-Directed SIMPLE IRA LLC structure. The 60-day period starts the day after the individual receives the distribution. Usually, no exceptions apply to the 60-day time period. However, in cases where the 60-day period expires on a Saturday, Sunday, or legal holiday, the individual may execute the rollover on the following business day.

An individual receiving an eligible rollover distribution may rollover the entire amount received or any portion of the amount received. The amount of the eligible rollover distribution that is not rolled over to an IRA is generally included in the individual’s gross income and could be subject to a 10% early distribution penalty if the individual is under the age of 591/2.

How the 60-Day Rollover Works with a Self-Directed SIMPLE IRA

The retirement tax professionals at the IRA Financial Group will assist you in rolling over your 60-day eligible rollover distribution to a new FDIC and IRS approved IRA custodian. Once the 60-day eligible rollover distribution has been deposited with the new IRA custodian within the 60-day period, the new custodian will be able to invest the SIMPLE IRA assets into the new IRA LLC “checkbook control” structure. Once the SIMPLE IRA funds have been transferred to the new IRA LLC, you, as manager of the SIMPLE IRA LLC, you would have “checkbook control” over your retirement funds so you can make traditional as well as non-traditional investments tax-free and penalty-free.

Self-Directed IRA Transfer Experts

The retirement tax professionals at the IRA Financial Group will assist you in transferring your SIMPLE IRA tax-free and penalty-free to a “checkbook control” self-directed SIMPLE IRA LLC solution. Each client of the IRA Financial Group will work directly with an assigned retirement tax professional to establish the Self-Directed SIMPLE IRA LLC solution and make sure that the self-directed IRA transaction is structured in the most tax efficient manner and is not in violation of any IRS rules.

To learn more about the Self-Directed IRA transfer or direct or indirect rollover rules, please contact a tax professional at 800-472-0646.

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Sep 15

Why You Should Open a Self-Directed IRA

Why Should I Establish a Self-Directed IRA?

A self-directed IRA LLC will offer you the ability to make traditional (stocks, mutual funds) as well as non-traditional investments (real estate, precious metals, etc.) tax-free and without custodian consent. Tired of seeing all your hard earned retirement assets lose value in the stock market? Upset that the value of your IRA or 401(k) has taken a dive over the last four years? Protect and better diversify your retirement portfolio with a self-directed IRA LLC. Take control of your retirement future and have the opportunity to make the investments you want when you want them.

With IRA Financial Group’s Self-Directed IRA LLC, a special purpose limited liability company (“LLC”) is created which is owned 100% by the IRA and managed by you or any third-person. The advantage of using an LLC to make the investment is that an LLC is treated as a passthrough entity for tax purposes meaning the owner of the LLC would be subject to the tax not the LLC itself. However, as per Internal revenue Code Section 408, IRAs are exempt from tax. As a result, in most cases, all income and gains generated by the IRA LLC would flow back to the IRA tax-free. In addition, the LLC investment vehicle allows the IRA owner to take more control of his or her retirement funds by keeping the IRA funds at a LLC bank account and not with a far away custodian offering “checkbook control” and greater flexibility to make investments quick and without delay.

With an IRA Financial Group self-directed IRA LLC, work with our in-house retirement tax professionals and gain the ability to protect your retirement future from a turbulent stock market or future inflation by having the opportunity to re-allocate your retirement portfolio into different asset classes, such as real estate, precious metals, private business, peer-to-peer lending, foreign currency or options. Don’t let Wall Street blow your retirement – diversify your retirement portfolio with a self-directed IRA LLC.

How Does IRA Financial Group’s Self-Directed IRA Differ from a Custodian Controlled IRA?

With IRA Financial Group “checkbook control” self-directed IRA LLC, making an investment is as simple as writing a check. No longer will you have to pay high IRA custodian fees or have to endure long delays and risk losing your deal as a result of having to have every IRA transaction pre-approved by the custodian. IRA Financial Group’s Self-Directed IRA LLC, is an IRS approved structure that allows you to use your retirement funds to make real estate and other investments tax-free and without custodian consent. The Self-Directed IRA involves the establishment of a limited liability company (“LLC”) that is owned by the IRA (care of the IRA custodian) and managed by you or any third-party. As manager of the IRA LLC, you will have control over the IRA assets and be able to make investments directly from your LLC bank account, which can be opened at any local bank. See an investment you want to make – simply write a check or wire the funds straight from your IRA LLC bank account. Don’t waste time and money relying on a custodian to make your IRA investments. The IRS gives you the ability to have more control and authority over your IRA assets – don’t let a custodian control your retirement future – get an IRS approved “checkbook control” self-directed IRA LLC. Work with our in-house retirement tax professionals to establish your IRS compliant self-directed IRA LLC.

A Self-Directed IRA LLC “Checkbook Control” structure offers one the ability to use his or her retirement funds to make almost any type of investment including real estate on their own without requiring the consent of any custodian tax-free!

Take Control of Your Retirement Funds Tax-Free!

The Self-Directed IRA structure has become a popular choice for gaining total investment control (“Checkbook Control”) over your IRA funds and making investments tax-free.

IRA Financial Group’s Self-Directed IRA LLC with “checkbook control” solution is tax court and IRS approved. A special purpose Self Directed IRA LLClimited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder – which is YOU. The IRA Custodian then transfers the IRA Holder’s retirement funds to the new IRA LLC’s bank account, which can be opened at any local bank providing the IRA holder with “checkbook control” over his or her IRA funds. When you find an investment that you want to make with your IRA funds, as manager of the LLC, you will simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. All investment income and gains would flow back to your Self-Directed IRA Tax-Free! The Self Directed IRA LLC with “checkbook control” allows you to eliminate the delays and costs associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

A World of Investment Opportunities

Tired of being forced to invest in stocks or mutual funds? Have an investment opportunity, such as real estate or a business investment that you would love to make with your IRA funds? Then the Self-Directed IRA LLC is your solution.

With a Self-Directed IRA LLC, you will be able to invest in almost any type of investment opportunity that you discover, including: domestic or foreign real estate (rentals, foreclosures, raw land, tax liens etc.), private businesses, precious metals (i.e. gold or silver), hard money & peer to peer lending as well as stock and mutual funds; your only limit is your imagination. The income and gains from these investments will flow back into your IRA tax-free.

Purchasing Real Estate Tax Free with a Self Directed IRA Real Estate LLC

The IRS has always permitted an IRA to purchase or hold domestic or foreign real estate or raw land. Making a real estate investment is as simple as writing a check with a Self Directed IRA – also known as a Self Directed IRA Real Estate LLC. The Self Directed IRA Real Estate LLC structure, which works the same way as the Self Directed IRA LLC structure, is used for tax-free investing IRA funds in real estate.

Purchasing Real Estate Tax Free with a Self Directed IRA Real Estate LLC

Since you are the manager of your Self-Directed IRA Real Estate LLC, you have the authority to make investment decisions on behalf of your IRA. One major advantage of purchasing real estate with a Self-Directed IRA is that all gains are tax-deferred until a distribution is taken (Traditional IRA distributions are not required until the IRA owner turns 70 1/2). In the case of a Self-Directed Roth IRA LLC, all gains are tax-free.

Stress-Free Investing

With a Self-Directed IRA structure, you will have the power to act quickly on a potential investment opportunity. When you find an investment that you want to make with your IRA funds, as manager of the LLC, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

Save on Custodian Fees

A Self-Directed IRA LLC structure will help you save a significant amount of money on custodian fees. With a Self-Directed IRA LLC you no longer have to pay excessive custodian fees based on account value and transaction fees. Instead, your IRA funds will be transferred tax-free via a passive custodian to a new LLC bank account where you as manager of the LLC can make investments, such as real estate tax-free and without custodian consent. The IRA custodian is not involved in any way with the IRA investment. In fact, the IRA custodian is not even aware of the type of investments that are being made since you, as manager of the LLC, are in total control of your IRA funds.

Shelter Income Tax-Free with a Self-Directed Roth IRA LLC

The Self-Directed Roth IRA LLC structure, which works the same way as the Self-Directed IRA LLC structure, is used for investing Roth IRA funds in real estate and other investments tax-free! Using a Self-Directed Roth IRA LLC to make investments will allow all the income and gains associated with the Roth IRA investment to grow tax-free and not be subject to tax upon withdrawal or distribution. The Self-Directed Roth IRA LLC presents a number of exciting tax planning opportunities.

The primary advantage of using a Self-Directed Roth IRA LLC to make investments is that all income and gains associated with the Roth IRA investment grow tax-free and will not be subject to tax upon withdrawal or distribution.

Asset & Creditor Protection

By using a Self-Directed IRA LLC with “Checkbook Control”, the IRA holder’s IRA will be protected for up to $1 million in the case of personal bankruptcy. In addition, most states will shield a Self-Directed IRA from creditors’ attack against the IRA holder outside of bankruptcy. Therefore, by using a Self-Directed IRA LLC, the IRA will be generally protected against creditor attack against the IRA holder.

Limited Liability Protection

By using a Self-Directed IRA LLC, your IRA will benefit from the limited liability protection afforded by using an LLC. By using an LLC, all your IRA assets held outside the LLC will be shielded from attack.

Don’t trust an investment advisor or real estate professional to establish your IRS compliant self-directed IRA structure!

Work directly with our in-house retirement tax professionals to setup an IRS compliant Self-Directed IRA LLC with “checkbook control”. IRA Financial Group was founded by retirement tax professionals that worked at some of the largest law firms in the United States, including White & Case LLP and Dewey & LeBoeuf LLP. Each client has direct access to our in-house retirement tax professionals to ensure that the Self-Directed IRA LLC structure is customized to satisfy the client’s retirement and investment objectives.

Why Work With the IRA Financial Group?

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP. Over the years, we have helped thousands of clients establish IRS compliant Self-Directed IRA LLC solutions. With our work experience at some of the largest law firms in the country, our retirement tax professionals’ tax and IRA knowledge in this area is unmatched.

To learn more about using a “Checkbook Control” Self-Directed IRA LLC to make real estate and other investments without tax, please contact one of our Self-Directed IRA Experts at 800-472-0646 for more information.

IRA Financial Group – Founded by Retirement Tax Professionals who know the Law!

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Sep 11

Advantages of using a Self-Directed Roth IRA

The main advantage of a Roth IRA over a Traditional IRA is that if you qualify to make contributions, all distributions from the IRA are tax-free. Furthermore, unlike traditional IRAs, you may contribute to a Roth IRA for as long as you continue to have earned income (for a traditional IRA – you can’t make any contributions after you reach age 70 1/2).

Self-Directed Traditional IRA

Self-Directed Roth IRA

Tax deductible contributions

Contributions are not tax deductible – contributions made to a Roth IRA are from after tax dollars

Distributions may be taken by age 59 1/2 and are mandatory by 70 1/2.

No Mandatory Distribution Age – with a Roth IRA you are not required to ever take distributions

Taxes are paid on amount of distributions (10% excise tax may apply if withdrawn prior to age 591/2)

No taxes on distributions if rules and regulations are followed

Available to everyone; no income restrictions

  • Single filers, Head of Household or Married Filing Separately (and you did not live with your spouse during the year) with modified adjusted gross income up to $114,000 can make a full contribution.  Contributions are phased-out starting at $114,000 and you cannot make a contribution if your adjusted gross income is in excess of $129,000.
  • Joint filers with modified adjusted gross income up to $181,000 can make a full contribution.  Once again, this contribution is phased-out starting at $181,000 and you cannot make a contribution if your adjusted gross income is in excess of $191,000.

Funds can be used to purchase a variety of investments (stocks, real estate, precious metals, notes, etc.)

Funds can be used to purchase a variety of investments (stocks, real estate, precious metals, notes, etc.)

IRA investments grow tax-free until distribution (tax deferral)

All earnings and principal are 100% tax free if rules and regulations are followed – No tax on distributions so maximum tax-deferral

Income/gains from IRA investments are tax-free

Income/gains from IRA investments are tax-free

Purchasing a real estate property and taking possession of the property after 59 1/2 would be subject to tax

Purchasing a domestic or foreign real estate property then taking possession after 59 1/2 would be tax-free

 

To learn more about the advantages of converting a Traditional IRA to a Self-Directed Roth IRA LLC please contact one of our IRA experts at 800-472-0646.

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Sep 09

The Checkbook Control Advantage

Experience the Self-Directed IRA LLC “Checkbook Control” Advantage

Many traditional IRA custodians advertise themselves as offering a Self-Directed IRA, but what that really means is that you will need approval from your custodian before making an investment. Whereas, in the case of a truly Self-Directed IRA, a limited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder providing the IRA holder with “checkbook control” over his or her funds.

In general, there are three categories of self-directed IRA structures distinguishable by the level of control the custodian exercises over your IRA investments.

1. Financial Institution Self-Directed IRA

With a financial institution self-directed IRA, you are able to direct your IRA investments, however, you are generally limited to investing in the financial products offered by the financial institution. For example, a financial institution such as Vanguard or Fidelity will allow you to select the type of investments for your IRA, but your choices would generally be limited to the financial products they offer, such a stocks, mutual funds, and bonds. With a financial institution self-directed IRA, you will not be permitted to make non-traditional investments such as real estate, precious metals, private business investments, foreign currency, options, etc.

2. Custodian Controlled Self-Directed IRA Without “Checkbook Control”

With a custodian controlled Self-Directed IRA without “Checkbook Control”, many types of nontraditional investments, such as real estate, are generally permitted, however, custodian consent is required in order to enter into and execute the transaction. This typically results in long delays and high custodian fees associated with the transaction. For example, before engaging in an IRA investment, you will be required to receive the consent of the custodian. To this end, you will be required to provide the custodian with the transaction documents for review as part of their transaction review process. As a result, it is common to experience time delays as well as high annual fees as well as additional transaction fees. For example, it is common for a moderately active investor with $50,000 in assets with a Self-Directed IRA custodian without checkbook control to end up paying from $400 to $600 in aggregate annual fees (i.e. account value fee, transaction fees, approval letters).

In addition, there is no guarantee that the custodian will approve your investment even though the investment would not violate IRS rules. Overall, with a custodian controlled self-directed IRA, even though you will generally be permitted to make most non-traditional IRA investments, time delays and high custodian fees are the common characteristics of using a custodian controlled self-directed IRA.

Experience the Self-Directed IRA LLC “Checkbook Control” Advantage3. Self-Directed IRA LLC with “Checkbook Control”

With a truly Self-Directed IRA, you will have total control over your IRA funds and you will no longer have to get each investment approved by the custodian of your account. Instead, all decisions are truly yours. When you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. A truly Self-Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

With a Self-Directed IRA LLC, a limited liability company (“LLC”) is established that is owned by the IRA account and managed by the IRA account holder. The IRA Holder’s IRA funds are then transferred by the Custodian to the LLC’s bank account providing the IRA holder with “checkbook control” over his or her IRA funds.

The Self-Directed IRA LLC “Checkbook Control” Structure has been in use for over 30 years. The notion of using an entity owned by an IRA to make an investment was first reviewed by the Tax Court in Swanson V. Commissioner 106 T.C. 76 (1996). In Swanson, the Tax Court, in holding against the IRS, ruled that the capitalization of a new entity by an IRA for making IRA related investments was a permitted transaction and not prohibited pursuant to Code Section 4975. The Swanson Case was later affirmed by the IRS in Field Service Advice Memorandum (FSA) 200128011.

With a Self-Directed IRA LLC with “Checkbook Control”, when you find an investment that you want to make with your IRA funds, simply write a check or wire the funds straight from your Self-Directed IRA LLC bank account to make the investment. The Self-Directed IRA allows you to eliminate the delays associated with an IRA custodian, enabling you to act quickly when the right investment opportunity presents itself.

 

Financial Institution Self-Directed IRA

Custodian Controlled Self-Directed IRA Without “Checkbook Control”

Self-Directed IRA LLC with “Checkbook Control”

Traditional investments options (stocks, mutual funds, etc.)

Yes

Yes

Yes

Nontraditional Investment options (i.e. real estate, precious metals, tax liens, etc)

No

Yes

Yes

Unlimited Investment Options

No

No

Yes

All Investments must be approved by the custodian

N/A

Yes

No

True “checkbook control”

No

No

Yes

Direct Access to your Retirement Funds

No

No

Yes

Limited Liability

No

No

Yes

High annual account fees

No

Yes

No

Transaction fees

No

Yes

No

Bankruptcy Protection of up to $1 million

Yes

Yes

Yes

For more information about the “Checkbook Control” advantage of the Self-directed IRA, please contact an IRA Expert from the IRA Financial Group @ 800.472.0646!

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