What is an individual or a solo 401(k)?
Also called as Uni-401(k) plan, an individual 401(k) plan is an Internal Revenue Code (Section 401) approved a qualified plan for retirement which is specifically designed for self-employed or sole-owned businesses. Similar to traditional IRAs, this plan offers cost-effective and tax-efficient investment options along with a few additional benefits. Although any business model which meets the criteria is eligible under this plan, it is most suitable for independent contractors, consultants, real estate agents etc. Initial funding for this plan can be done through rollover funds from traditional IRAs, SEP plans, previous 401(k) plans, profit sharing plans, defined benefit plans, 403(b) plans etc. by setting up new trust account or by transferring all the funds to the current custodian trust account.
Benefits of an individual 401(k) plan:
Taxes can be reduced on contributions and the earnings can grow by deferring the tax. Assets are tax-free until withdrawal at retirement.
As the plans and agreements are customized by self, the administering requirements are fewer and simple compared to that of traditional plans.
No complications of filing a Form 5500 unlike the traditional 401(k) plans to be IRS compliant until the plan reaches $250000.
Unlike the traditional 401(k) plan, there is no vesting schedule for the business as one would be vested immediately.
Additional tax deferrals can be made by representing the spouse of self and spouse of partner(s) as part of the business.
Funding can be a combination of salary deferrals and annual profit sharing contributions. A participant can control the way investments are made and not necessarily be an annual contribution.
It allows an individual to borrow tax-free loans from the retirement funds based on certain terms and conditions.
Rules for withdrawing from the plan:
An individual should either end the employment or retire to be able to make any withdrawals.
A penalty of 10% will be levied for withdrawals made before the age of 59.5.
All distributions other than RMDs, hardship withdrawals, and direct rollovers will be subjected to a 20% federal tax withholding.
One must start to take an annual RMD from the age of 70.5 if he/she owns 5% share in a business. Failing which, a penalty of 50% on the total distribution will be applicable.
The contribution is limited to $54000 ($60000 for those above 60 years of age) for the tax year 2017.
An annual IRS form 5500 is required to be filed when the assets become equal or greater than $250000.
Funding deadlines:
For Solo 401(k) plan establishment- 31st December or end of FY, whichever is earliest.
For salary deferrals- End of the business tax year.
For profit-sharing contributions- Tax filing date of the business (Any extensions will be added).
There are companies that work on collecting and maintaining credit information of consumers. These are known as credit reporting agencies (CRAs). There are three such major CRAs in the country, namely Equifax, Experian, and TransUnion. Apart from these, there are other smaller-scale agencies too that specialize at the job. If you’re worried about “where to get my credit score?,” the larger CRAs are the most reliable bets.
These major CRAs obtain information from companies that you hold business and transactions with. People or companies that lend you money regularly report to these CRAs on your repaying status. There is also detailed information on the amount you are indebted and whether you have ever defaulted on your payments. Aside from the reports obtained from lenders, these companies also tally your general records based on certain other aspects. Some of these aspects are your public records from the local and state judiciary. These include your tax records and bankruptcy information. This information makes up an important chunk of your credit score and its report.
Equifax
Present in 24 countries, Equifax is an agency that offers consumers protection against identity theft and credit fraudulence. They also sell credit reports and credit monitoring assistance to businesses.
Experian
Experian started off in London and is now a trusted agency in 39 different countries. It provides you with a credit score, credit report, and even credit tracker on subscription. The agency uses FICO 8 system of credit score calculation. Experian was a part of Forbes’ “World’s Most Innovative Companies” in 2018.
TransUnion
Based across 30 countries with a database of over 1 billion consumers, TransUnion is another CRA giant. The agency, like the other ones, will provide you with your credit score and your credit reports. In case you decide to freeze your TransUnion credit report, it will also go the extra mile to notify Equifax and Experian, which frankly is a big help especially in case of identity theft and credit fraud.
So, the next time you are sat wondering “where to get my credit score?,” think of these three giants that provide you with an annual credit score and credit report for free once each year. However, if you are looking for more frequent updates, you can subscribe to their services and receive your monthly updates.
Did you know that you have more than a single credit score? Agencies calculate your credit score based on the data in your credit reports. If you are wondering, “where to get my credit score?,” there are three main credit reporting agencies. These can have different credit scores for you if your information on each of their credit reports is different. Also, these agencies charge a fee to reveal your credit score.
Recently, it has become easier to track and get hold of your credit score without paying any fees. You can get it from your credit card company, your loan provider, and even from a non-profit counselor. Here are a few tips you can use to check your score.