Jun 30

Hows to Use Your IRA 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 risky 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?

With 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!  How to Use My IRA Funds to Buy a Business

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.

IRA Financial Group Facebook pageBergman IRA Report Twitter page
IRA Financial Group

Jun 27

Transferring a SEP IRA to a Self-Directed IRA LLC

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 Roth Self-Directed IRA.

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

Transfers and rollovers are types of transactions that allow movements of assets between like IRAs – Traditional IRA to Traditional IRA, including Traditional IRAs that contain simplified employee pension (SEP) contributions. A SEP IRA transfer is the most common method of funding a Self-Directed IRA LLC or Self-Directed Roth IRA.

SEP IRA Transfers to a Self-Directed IRA

The SEP Self-Directed IRA LLC SolutionA Traditional IRA-to Traditional IRA, including Traditional IRAs that contain SEP contributions, transfer is one of the most common methods of moving assets from one IRA to another. A transfer usually occurs between two separate financial organizations, but a transfer may also occur between IRAs held at the same organization. If an IRA transfer is handled correctly the transfer is neither taxable nor reportable to the IRS. With an IRA transfer, the 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 IRA transfer to be tax-free and penalty-free, the IRA holder must not receive the 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 IRA LLC by transferring your current SEP IRA funds to your new Self-Directed IRA structure tax-free and penalty-free.

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

Your assigned retirement tax professional will work with you to establish a new Self-Directed IRA account at a new FDIC and IRS approved IRA custodian. The new custodian will then, with your consent, request the transfer of your SEP 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 IRA custodian, the new custodian will be able to invest the IRA assets into the new IRA LLC “checkbook control” structure. Once the funds have been transferred to the new IRA LLC, you, as manager of the 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 SEP IRA account to roll the funds into a Self-Directed 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 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 SEP IRA assets into the new IRA LLC “checkbook control” structure. Once the SEP IRA funds have been transferred to the new IRA LLC, you, as manager of the 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 SEP IRA tax-free and penalty-free to a “checkbook control” self-directed IRA LLC solution. Each client of the IRA Financial Group will work directly with an assigned retirement tax professional to establish the Self-Directed 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.

IRA Financial Group Facebook pageBergman IRA Report Twitter page
IRA Financial Group

Jun 25

Why Choose the IRA Financial Group for Your Self-Directed IRA?

Expertise: 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. With our work experience at some of the largest law firms in the country, our tax professionals’ retirement plan and tax knowledge in this area is unmatched.

Leadership: IRA Financial Group is the market’s leading* Self-Directed IRA and Solo 401K Plan provider. We have helped over 6,500 clients establish IRS compliant Self-Directed IRA and Solo 401k Plans.

Prestige: IRA Financial Group and its founders have been featured on CBS News, PBS Nightly Business Report, and in over 100 major print publications, including Forbes, Fox Business, the Wall Street Journal, CNN Money, USA Today, The San Francisco Chronicle, Dallas Morning News, Law.com, American Lawyer, the Houston Chronicle, the Chicago Tribune, and many more.

Value: With IRA Financial Group, you no longer have to incur excessive fees to establish and administer an IRS compliant Self-Directed IRA LLC or Solo 401k Plan. We are committed to offering our clients customized professional services at a fair and reasonable price and we are able to deliver this by harmoniously blending professionalism, quality and efficiency.

Our Promise: If for any reason you elect to not go through with the Self-Directed IRA LLC structure or Solo 401(k) Plan, you will not be responsible for paying our one-time set-up fee – it’s that simple – no questions asked! Cancel anytime – we understand that in some cases plans change or an anticipated transaction does not materialize and we certainly don’t believe it would be fair to our clients to impose a fee for a structure that won’t be needed.

Access: When choosing the IRA Financial Group, you will have direct and unlimited access to our in-house tax and ERISA professionals, as well as our in-house CPAs. Unlike our competitors, we don’t limit your access to our tax professionals; in fact, you will likely have the opportunity to talk with one of them before you even get started. In addition, each client of the IRA Financial Group is assigned a retirement tax professional to assist in establishing an IRS compliant Self-Directed IRA LLC or Solo 401k Plan structure.

Security: IRS rules require your retirement funds to be transferred from custodian to custodian. We at the IRA Financial Group never have access to your retirement funds in any way. You, as the manager of the IRA LLC or trustee of the 401(k) Plan, will be the only party with direct access to your retirement funds – true “Checkbook Control”.

Integrity: We are guided by the rules of ethical conduct in all that we do. Our relationships with clients are built on trust, respect, and confidentiality.

Results: We are committed to our clients’ satisfaction and strive to meet and exceed our clients’ expectations.

Guarantee: The IRA Financial Group is fully committed to offering IRS compliant self-directed retirement structures and accordingly offers a full IRS audit guarantee in connection with the validity of the Self-Directed IRA LLC and Solo 401(k) Plan. The IRA Financial Group stands by the legality of the Self-Directed IRA LLC and Solo 401(k) Plan and will fully defend its merits against any IRS audit.

We respect your time! You will never be pestered by a salesperson or receive unsolicited emails!

The mission of IRA Financial Group is to empower prospective clients with relevant information needed to make informed decisions on investment activities conforming to tax law and IRS rules.

We leave the ball in your court to decide if you wish to proceed with us. Of course, we would welcome the opportunity to work with you. If you decide to be our client, we will be here for you step-by-step to set up the right structure for you and to help to make sure you implement it correctly.

Once again, we will not send unsolicited follow-up communications from our tax experts – we just respect your privacy and time.

Get started today: Getting started is quick, easy, and inexpensive. We take a small deposit up front to cover LLC state filing fees or Solo 401(k) Plan establishment costs, and our one-time set-up fee is only due once the structure has been established. In addition, our fee can be paid in full using your retirement funds.

Self Directed IRA LLC, Solo 401K, Business Acquisition Solution

IRA Financial Group will take care of setting up your entire IRS compliant Self-Directed IRA LLC or Solo 401K Plan. The whole process can be handled by phone, email, fax, or mail and typically takes between 7-21 days to complete, the timing largely depending on the state of formation and the custodian holding your retirement funds. Our tax and ERISA professionals are on-site greatly reducing the set-up time and cost. Most importantly, each client of the IRA Financial Group is assigned a retirement tax professional to help with the establishment of the Solo 401k Plan. You will find that our fee for this service is significantly less than other companies that perform the same or similar services.

Contact us with any questions you might have at 800.472.0646!

IRA Financial Group Facebook pageBergman IRA Report Twitter page
IRA Financial Group

Jun 24

Some Basic IRA Rules

An individual retirement account is a tax-beneficial way to save for retirement.  Anyone can open an IRA as long as they have earned income during the year(s) he/she contributes.  There are two basic types of IRAs: a traditional plan or a Roth IRA.  While the tax treatment is different for the accounts, there are some basic rules for each.

As previously mentioned, anyone can open an IRA at just about any financial institution.  Unlike a brokerage account which normally requires a substantial deposit, you can start an IRA for as little as you want at many major institutions.  One of the popular excuses for not saving for retirement is “I can’t afford it”.  With an IRA, you can!  Saving even a small percentage every month is better than nothing.

There are basic rules that govern most IRA plansFor those who can afford it, the maximum contribution each year is the same for both traditional and Roth plans.  For 2014, that number is the lesser of $5,500 or the total amount of earned income for the year.  If you are age 50 or older, you may contribute another $1,000 with the catch-up contribution.  If you are a part-timer with $2,000 of income for the year, that’s the max you can contribute.  Note that this limit applies to all of your IRA accounts.  You cannot max out multiple IRAs during a given year.

There are income limits to the tax benefits you receive for your IRA contributions.  First for a traditional IRA: if you have a work-sponsored retirement plan (such as a 401(k)), your modified adjusted gross income (MAGI) must be below $60,000 if you are single or $96,000 if you’re married filing jointly to receive the full deduction.  The deduction phases out up to $70,000 for singles and $116,000 for married couples.  If you earn more than that, you receive no tax deduction.  Note that if only one spouse has a plan available to him/her, that amount increases to $173,000.  As for Roth IRAs, your MAGI must be less than $114,000 for singles and $181,000 for married couples to fully contribute.  Again, that phases out until $129,000 and $191,000 respectively.  If you exceed those amounts, you cannot directly contribute to a Roth.

Withdrawal rules differ slightly as well.  All contributions to a Roth IRA can be withdrawn at any time without penalty.  Withdrawal of earnings however will be assessed a 10% early withdrawal penalty if you are under age 59 1/2.  As for traditional plans, most withdrawals before said age will be hit with the 10% penalty.  There are exceptions such as higher education costs, first time home buying or medical expenses.  Lastly, traditional plans require you to start withdrawing money once you reach age 70 1/2.  The IRS wants their money!  Since Roth IRAs are funded with after-tax money, there are no mandatory withdrawals, ever.

Finally, you can invest in just about anything your financial provider will let you.  With a workplace plan, you are limited to the choices your employer provides you.  An IRA can be invested in stocks, bonds, ETFs, mutual funds, CDs, etc.  With a self-directed IRA from the IRA Financial Group, you have even more freedom than what most financial institutions offer.  Aside from the usual, you can invest in anything from real estate and precious metals to tax liens and certain coins.

What are you waiting for?  Get started saving for retirement as soon as possible!  If you have any questions, please contact one of our IRA experts @ 800.472.0646 or visit our website today!

IRA Financial Group Facebook pageBergman IRA Report Twitter pageIRA Financial Group

Jun 20

Making an Investment with a Self-Directed IRA Loan

The Self-Directed IRA is a retirement solution that will unlock a world of investment opportunities. The Self-Directed IRA is a retirement investment vehicle that allows one to use their retirement funds to make traditional as well as non-traditional investments, such as real estate tax-free and without custodian consent. In most instances, investors using retirement funds to make an investment will use cash to make the investment. Whether the investment is in the form of stocks, precious metals, or real estate most investors using retirement funds to make the investment will not borrow any funds to make the investment. In other words, most investors using retirement funds will use cash to make the investment. One significant reason why retirement account investors will generally not borrow money (also called debt or leverage) as part of an investment of real estate acquisition is the Internal Revenue Code Section 4975 prohibits the IRA holder (you) from personally guaranteeing a loan made to the IRA. Pursuant to Internal Revenue Code Section 4975(c)(1)(B), a disqualified person (i.e. the IRA holder) cannot lend money or use any other extension of credit with respect to an IRA. In other words, the IRA holder cannot personally guarantee a loan made to his or her IRA. As a result, in the case of a Self-Directed IRA, one could not use a standard loan or mortgage loan as part of an IRA transaction since that would trigger a prohibited transaction pursuant to Code Section 4975. This type of loan is often referred to as a recourse loan since the bank can seek recourse or payback from the individual guaranteeing the loan. These loans are generally the most common types of loans offered by banks and financial institutions. Thus, in the case of a Self-Directed IRA, a recourse loan cannot be used. This leaves the Self-Directed IRA investor with only one financing option – a nonrecourse loan. A nonrecourse loan is a loan that is not guaranteed by anyone. In essence, the lender is securing the loan by the underlying asset or property that the loan will be used for. Therefore, if the borrower is unable to repay the loan, the lender’s only recourse is against the underlying asset (i.e. the real estate) not the individual – hence the term nonrecourse. In general, nonrecourse loans are far more difficult to secure than a traditional recourse loan or mortgage. There are a number of reputable nonrecourse lenders, however, the rate on a nonrecourse loan are typically less attractive than a traditional recourse loan.

Using a Loan With a Self-Directed IRA to Make an InvestmentThe IRS allows IRA and 401(k) plans to use nonrecourse financing only. The rules covering the use of nonrecourse financing by an IRA can be found in Internal Revenue Code Section 514. Code Section 514 requires debt-financed income to be included in unrelated business taxable income (UBTI or UBIT), which generally triggers a 35% tax. In general, if nonrecourse debt financing is used, the portion of the income or gains generated by the debt-financed asset will be subject to the UBTI tax, which is generally 35%. Thus for example, if an individual invests 70% IRA funds and borrows 30% on a nonrecourse basis, 30% of the income or gains generated by the debt financed investment would be subject to the UBTI tax. For example, if a Self-Directed IRA investor invests $70,000 and borrows $30,000 on a nonrecourse basis (the IRA holder is not personally liable for the loan) – 70/30 equity to debt finance ratio, and the IRA investment generates $1,000 of income annually, 30% of the income or $300 would be subject to the UBTI tax. Note – the $300 tax base could be reduced by any pro rata portion of deduction/depreciation associated the debt-financed property. The rationale behind this is that since the IRS is treating the IRA, which is typically treated as tax-exempt pursuant to IRC 408, as a taxpayer by imposing a tax on the debt-financed portion, the IRS will allow the investor to allocate proportionally any asset expenses or depreciation in order to reduce the tax base. The IRS Form 990-T is the form where the UBTI must be disclosed to the IRS.

Interestingly, by investing in real estate through a Solo 401K Plan, if one uses nonrecourse financing, the Solo 401K plan will escape the UBTI/UBIT tax due to an exception to the Unrelated Debt Financed Income (UDFI) rules found under IRC 514(c)(9). This is one reason why the Solo 401K Plan is such an attractive investment vehicle.

To learn more about the rules surrounding using a loan with a Self-Directed IRA to make an investment please contact a Self-Directed IRA Expert at 800-472-0646.

IRA Financial Group Facebook pageBergman IRA Report Twitter page
IRA Financial Group

Jun 19

The Most Tax Efficient Solution for Making Real Estate Investments – The Self-Directed Roth IRA

“Checkbook control” self-directed Roth IRA LLC real estate solution allows for tax-free real estate investing.

IRA Financial Group, the leading provider of “checkbook control” self-directed Roth IRA LLC solutions introduces the most tax efficient and IRS approved solution for investing in real estate tax-free with retirement funds. IRA Financial Group’s self directed Roth IRA LLC offers one the ability to use his or her after-tax retirement funds to make almost any type of real estate investment on their own without requiring the consent of any custodian or person, including real estate without tax or penalty. The IRS only describes the type of investments that are prohibited, which are very few. “ IRA Financial Group’s self-directed Roth IRA real estate solution is the best legal tax shelter for real estate investors, “ stated Adam Bergman , a tax partner with the IRA Financial Group.

IRA Financial Group’s Self-Directed Roth IRA LLC for real estate investors, also called a real estate IRA with checkbook control, 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 Roth IRA LLC involves the establishment of a limited liability company (“LLC”) that is owned by the Roth IRA (care of the Roth IRA custodian) and managed by the Roth IRA holder or any third-party. As manager of the Roth IRA LLC, the Roth IRA owner will have control over the Roth IRA assets to make the investments he or she wants and understand – not just investments forced upon you by Wall Street.

The Most Tax Efficient Solution for Making Real Estate Investments – The Self-Directed Roth IRA The IRS has always permitted a Roth IRA to purchase real estate, raw land, or flip homes. “IRA Financial Group’s “checkbook control” self-directed Roth IRA LLC solution, allows investors the ability make real estate purchases and generate income and gains without ever paying tax stated Mr. Bergman. “An increasing number of clients are realizing that using a self directed Roth IRA to make investments will allow one to generate tax-free income for their retirement, stated Jacky Ospina, a retirement tax specialist with the IRA Financial Group.

Instead of buying real estate with personal funds and being subject to tax on the income or upon the disposition of the asset, a Self Directed Roth IRA real estate LLC with Checkbook Control will allow one to buy real estate, including rental properties without paying tax immediately. With a self-directed real estate Roth IRA, all income and gains generated by the IRA LLC investment will flow back to the IRA tax-free.

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 Facilitator. 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.

IRA Financial Group Facebook pageBergman IRA Report Twitter page

Jun 17

Rules for Your SIMPLE IRA in 2014

If you are a small business owner and do not have a retirement plan in place, one option you may consider is the SIMPLE IRA – the Savings Incentive Match PLan for Employees.  It’s an inexpensive and, well, simple plan to manage and administer.  Here are the rules for a SIMPLE IRA.

You are eligible for a SIMPLE IRA is you are a self-employed individual or a small business owner with less than 100 employees.  Like most retirement plan options, they offer tax-deductible contributions, tax-deferred earnings and a wide arrange of investment opportunities.  It doesn’t matter if you have a partnership, a corporation or a sole proprietorship, you can open a SIMPLE plan.  A SIMPLE IRA is a salary deferral plan that has both employer and employee contributions.  The employee can decide how much he/she wishes to contribute and can adjust the amount during the election period annually.  As the employer, you must also make contributions.

A SIMPLE IRA is a great retirement plan for small businessesOne of the major benefits of the SIMPLE IRA is the ability to save your business thousands of dollars in taxes each year.  Further, you might be eligible for a tax credit during the first three years of the plan for costs in setting it up.  You have until October 1, 2014 to start a SIMPLE IRA for your business this year.

As an employee, you may contribute up to $12,000 in pre-tax money for 2014.  That number increases to $14,500 if you are age 50 or older.  As the employer, you have two options for contributing.  First, you can match your employees’ contribution dollar for dollar up to 3% of the participants annual salary.  Secondly, you may choose to contribute 2% of every eligible employee’s yearly compensation.  Note that for 2014, the maximum amount used to figure out compensation is $260,000.  All contributions are 100% vested no matter the employee’s tenure.

To be eligible to participate in the plan, an employee must have $5,000 in earned income in any two previous years and be expected to earn at least that during the current year.  Part-timers must be included, however, union employees may be excluded.

Withdrawals work pretty much like a traditional IRA.  You make take a distribution from your SIMPLE IRA, but if you are under age 59 1/2, you’ll be subject to a 10% early withdrawal fee unless you meet the hardship withdrawal criteria.  If you withdraw within the first two years of the SIMPLE start date, that penalty jumps to a whopping 25%!  As with traditional plans, once you reach age 70 1/2, you must start taking required minimum distributions.  The amount you must withdraw is based on your plan assets and your life expectancy.  Withdrawals are taxed during the year in which you take them.  Because of this, take note of your tax bracket as a large withdrawal might bump you up (which you do not want!).  Lastly, loans are not permitted from a SIMPLE IRA.

In conclusion, if you are self-employed or own a small business, a SIMPLE IRA might be worth considering.  The tax experts at the IRA Financial Group can help determine if this is the right plan for you or if your needs are better suited with a different plan.  Give them a call @ 800.472.0646 to learn all about the SIMPLE IRA and all the investment options they offer.

IRA Financial Group Facebook pageBergman IRA Report Twitter page

Jun 16

Self-Directed IRA Maximum Contributions

The IRS only allows you to contribute to a self-directed IRA so much every year.  That number fluctuates based on cost of living increases.  Here are the contributions maximums for your IRA plans for 2014:

  • The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500.  The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $60,000 and $70,000, up from $59,000 and $69,000 in 2013.  For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $96,000 to $116,000, up from $95,000 to $115,000.  For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $181,000 and $191,000, up from $178,000 and $188,000.  For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI phase-out range for taxpayers making contributions to a Roth IRA is $181,000 to $191,000 for married couples filing jointly, up from $178,000 to $188,000 in 2013.  For singles and heads of household, the income phase-out range is $114,000 to $129,000, up from $112,000 to $127,000.  For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $60,000 for married couples filing jointly, up from $59,000 in 2013; $45,000 for heads of household, up from $44,250; and $30,000 for married individuals filing separately and for singles, up from $29,500.

The limit on SIMPLE IRAs also remains the same for 2014 at $12,000.  The catch-up contribution limit also remains unchanged at $2,500.

If you have a SEP IRA, contribution levels increase by $1,000 to $52,000.  That’s based on the amount they can contribute as an employer, as a percentage of their salary; the new compensation limit used in the savings calculation is up $5,000 to $260,000.

If you have any questions, please contact a tax expert at the IRA Financial Group @ 800.472.0646!

IRA Financial Group Facebook pageBergman IRA Report Twitter page

Jun 13

Self-Directed IRA Investors With Cash Helping To Spur Real Estate Market By Making Up For Shortage Of First-Time Buyers

Real estate IRA investors with cash and wealthy foreigners making up a bigger percentage of real estate buyers than first-time home buyers

IRA Financial Group, the leading provider of self-directed IRA LLC solutions with “checkbook control” has seen a huge surge in self-directed IRA real estate investors with cash wining bidding wars on homes against first-time home buyers who are facing a difficult time obtaining financing. Cash purchases traditionally make up a small percentage of home sales, however, over the last few years, due to retirement account holders and wealthy foreigners, all cash home sales are becoming the norm and not the exception. “Our self-directed IRA LLC clients are bringing an attractive tactic to the negotiating table: an all-cash offer, which has proven very successful, “ stated Jean Scharfman, a retirement tax specialist with the IRA Financial Group. “It really seems like it is the self-directed IRA investors and wealthy individuals that is keeping the U.S. real estate market alive, “ stated Ms. Scharfman.

Self-Directed IRA Investors With Cash Helping To Spur Real Estate Market By Making Up For Shortage Of First-Time BuyersThe primary advantage of using a Self Directed IRA LLC to make investments is that investments can be made by simply writing a check. In addition, all income and gains associated with self directed IRA investments grow tax-deferred.

With IRA Financial Group’s self directed IRA LLC solution, traditional IRA or Roth IRA funds can be used to buy real estate throughout the United States and globally in a tax-deferred account by simply writing a check. “By using a self-directed IRA, our clients have been able to use cash to find attractive real estate opportunities while gaining the opportunity to move quickly on a potential investment, “ stated Jacky Ospina, a retirement tax specialist with the IRA Financial Group.

IRA Financial Group’s Self-Directed IRA for real estate investors, also called a real estate IRA with checkbook control, 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 Roth 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.

Using IRA Financial Group’s self directed IRA LLC with “checkbook control” solution is to make real estate investments offers real estate investors the ability to make real estate investments quickly without any custodian delay.

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 Facilitator. 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.

Jun 12

FBAR reporting for self-directed IRA LLC investors with a foreign bank account is due by June 30th

If your retirement account has a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR) by June 30, 2013.” The FBAR is required because foreign financial institutions may not be subject to the same reporting requirements as domestic financial institutions. The FBAR is a tool to help the United States government identify persons who may be using foreign financial accounts to circumvent United States law. Investigators use FBARs to help identify or trace funds used for illicit purposes or to identify unreported income maintained or generated abroad.

FBAR reporting for self-directed IRA LLC investors with a foreign bank account is due by June 30thIn general,unless an exception applies, all United States persons are required to file an FBAR if: (i) The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and (ii) The aggregate value of all foreign financial accounts exceeded $10,000 at any time during the calendar year to be reported. According to the Internal revenue Service, a financial interest arises when the owner of record or holder of legal title; the owner of record or holder of legal title is the agent or representative; or the U.S. person would have a sufficient interest in the entity that is the owner of record or holder of legal title.

According to the IRS, an IRA and 401(k) Plan would generally exempt from filing the FBAR form.  However, it is unclear whether a Self-Directed IRA LLC would be exempt from the FBAR requirement since the exception only states  “IRA owners and beneficiaries” and there is no guidance as to whether the IRS would view the LLC as separate and distinct from the IRS.  As a result, self-directed IRA LLC clients with foreign bank accounts should contact their tax accountant for additional information on the FBAR filing requirements.

In addition, taxpayers with specified foreign financial assets that exceed certain thresholds must report those assets to the IRS on Form 8938, Statement of Specified Foreign Financial Assets. The new Form 8938 filing requirement does not replace or otherwise affect a taxpayers requirement to file FBAR. The Form 8938 is due when the taxpayer’s income tax return is filed, including extensions.

If one buys foreign real estate and holds it via a foreign corporation that itself is owned by a retirement account, IRS Form 5471 will likely have to be filed since the retirement account will own an interest in a foreign corporation.

For more information on the foreign reporting rules in connection with using a self-directed IRA, please contact a retirement tax specialist at 800-472-0646.

IRA Financial Group Facebook pageBergman IRA Report Twitter page