Small Business Plans

1. Questioner: Marc

   Question: Hi, We would like to take out some funds from a SEP plan (not IRA) to cover education costs for our two college enrolled children. My husband is only 52 and I am 51. If we are using these funds for qualified education expenses do we still need to pay the early withdrawl penalty and add the distribution to our income? We are in the 28% tax bracket and we did not qualify for the Hope Education Credit last year due to to much income. Thank you and I hope we provided you with enough information. View Answer

2. Questioner: Susi

   Question: I am a 66 year old single female, trying to eek out a living in real estate. Last year, I had to take $27,000 out of my SEP to live on. I understand I have to pay taxes on that as income, but I think I had to pay the self-employment tax on it as I earned it. Correct? So all I'll owe is the "regular" tax and no penalty since I'm over 59 1/2 ?? Thank you for your time. View Answer

3. Questioner: Sue

   Question: Thank you in advance! My dad is 80, he had his own sole proprietor business, and has a keogh money purchase and profit sharing plan, he is the only one in it.The investment company sent him a letter that they are getting out of keoghs, and he has to transfer to an ira or 401k. We're both lost on this--can you give us a simple answer as far as what he should do--I thought he is too old to set up an ira, he has no earned income. thanks View Answer

4. Questioner: Angela

   Question: How do we determine what the taxes and penelty would be on an early withdrawal from our SEP? Hypothetically speaking: we have $200,000.00 in our SEP, age 48 and want to take out $100,000.00. We are currently in the 33% tax bracket due to our income. Can you give me so info? View Answer

5. Questioner: Mike

   Question: Hi Sir, I'm self-employed and my dear wife is my sole employee other some contract people. I've heard recently about a personal 401K which I might qualify for and, that it generally allows for larger contributions yearly. This would be important to us since I am 50 and drastically need to catch up now that my business is more profitable. As a CFP, what is your opinion of these? Any "gotchas"? Or are there other vehicles you might steer me toward that are tax advantaged and allow a daudler like me to try to catch up more easily? Thanks very much for your time and expertise. View Answer

6. Questioner: John

   Question: I recently started up an online sales company.  It is set us as a sole proprietorship and I am the only employee.   I would like to know what is the best retirement account to set up for max savings. This will be my only source of income, I am 55 years old. My net seems to be about 6-9000 per month so far. I have been recommended both a SEP and a Solo 401K.  What do you recommend, if you need additional information please let me know. Thank you for your time. View Answer

7. Questioner:Teri

   Question: My FA says that I (a small LLC) with a Solo 401k that I max out every year cannot also contribute to a Roth. Why is that? View Answer

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