Have you ever felt like your taxes are way too high? You probably have. Join Vee Khuu (Real Estate Lab Podcast) and Dmitriy Fomichenko (Sense Financial Services) as they chat about Solo 401(k)’s and how you could shelter your hard-earned income from taxes. They also talk about IRAs and how they differ from one another. You don’t want to miss this!

Click to Tweet ➡️ Learn how 401(k) expert Dmitriy Fomichenko of Sense Financial Services shelter his hard-earned income from taxes – Listen to the podcast now on the Real Estate Lab Podcast! https://bit.ly/RealEstateLabPodcast ⬅️

What’s in it for me in a Solo 401(k)?

Simply speaking, a Solo 401(k) is a retirement plan designed for people who are self-employed or own a small business. Furthermore, you cannot have any full-time employees working for a year, nor have your employees go over $1,000 a year. Your company could be in any shape or form – an LLC, partnership, corporation, or just a sole proprietorship. The most significant benefit you could get is a tax liability. This plan allows you to contribute a large amount of your income into this plan, essentially sheltering it from taxes.

Why is this a big deal? If you’re successful at what you do, that means you’re earning a lot. That also means that you’re paying a lot of taxes for the income you’re generating. With a solo 401(k), you could save up to $63,000 of your annual income from taxes. If you have a business with your partner, that could get over $120,000 tax-free!

Simply speaking, a Solo 401(k) is a retirement plan designed for people who are self-employed or own a small business. Furthermore, you cannot have any full-time employees working for a year, nor have your employees go over $1,000 a year. Your company could be in any shape or form – an LLC, partnership, corporation, or just a sole proprietorship. The most significant benefit you could get is a tax liability. This plan allows you to contribute a large amount of your income into this plan, essentially sheltering it from taxes.

Why is this a big deal? If you’re successful at what you do, that means you’re earning a lot. That also means that you’re paying a lot of taxes for the income you’re generating. With a solo 401(k), you could save up to $63,000 of your annual income from taxes. If you have a business with your partner, that could get over $120,000 tax-free!

Click to Tweet ➡️ Do I have to think about retirement this early? What’s a solo 401(k) to begin with? Catch Dmitriy Fomichenko on this episode from the Real Estate Lab Podcast! https://bit.ly/RealEstateLabPodcast ⬅️

What about IRAs? How different are they from Solo 401(k)’s?

To start, IRAs are also retirement plans that have similar rules to a 401(k). Though they both essentially give out tax-free distributions, there are a lot of differences. IRAs have a lower contribution limit, and they also deal with some taxes that a Solo 401(k) does not. In addition to these, Dmitriy talks about the nuances between the two. Did you know that there is also a Roth component to a Solo 401(k)? If you want to know the details, head on over to the podcast to hear it from the expert!

Click to Tweet ➡️ Which of IRAs and Solo 401(k)’s is better? Catch the interview on the Real Estate Lab Podcast! https://bit.ly/RealEstateLabPodcast ⬅️

About Dmitriy Fomichenko:

Dmitriy Fomichenko is the founder and president of Sense Financial Services LLC, a boutique financial firm specializing in self-directed retirement accounts with checkbook control.  He began his career in financial planning and real estate investing in 2000. He owns multiple investment properties in various states and is a licensed California Real Estate Broker. Over the years, he has taught hundreds of investment and financial planning seminars and has mentored thousands of investors.

Sense Financial Services was inspired by a series of conversations Dmitriy had with his mentors in the real estate investor business.  While many were exceedingly successful in their real estate investments, their retirement accounts were losing money. This conundrum prompted Dmitriy to spend several months consulting with industry experts and researching the powerful concept of employing self-directed retirement accounts for investment purposes. Integrating his knowledge of how to successfully manage self-directed IRAs and 401ks with his expertise as an investor and mentor, Dmitriy began consulting individual investors on how to put more thought and diligence into their retirement and investment planning.

Dmitriy founded Sense Financial Services to help his clients maximize their returns on investments while protecting their hard-earned money. He is very passionate about helping families and individuals achieve financial freedom by following proven Biblical principles of financial planning and investing.

Dmitriy resides in Southern California with his wife and 13-year old daughter.  In his spare time, he enjoys studying systematic theology, spending time with his family and visiting new places.

Outline of the Episode:

  • [00:52] Introduction: Growing up in Russia, moving to the U.S., mechanical engineering, and solo 401(k)’s.
  • [07:49] Don’t rely on just your full-time job, diversify your income sources!
  • [09:55] A solo 401(k) crash course: What is it, and what benefits does it give you?
  • [14:25] Is it possible to use a solo 401(k) in combination with a health savings account? Is that even profitable?
  • [15:47] The similarities between a Solo 401(k) and Self-Directed IRAs in purchasing real estate or investing.
  • [19:23] The heavy risks to partnering with your IRA or 401(k). What is a prohibited transaction? If you commit one, which of the two allows you to fix it?
  • [23:45] Dmitriy’s secret to utilizing the benefits of 401(k)’s himself.
  • [25:10] There are tax liabilities we should pay attention to for 401(k)’s. What are these?
  • [28:10] The existence of a Roth component of the solo 401(k). How does that work?
  • [30:52] Requirements to meet if you want to get 401(k)’s.
  • [34:25] Is there a profit margin that you need to consider? How much would that be?
  • [38:00] Distributions taken from Roth IRAs are tax-free, right? What about the Roth component of a Solo 401(k)? How are the tax-deferred and tax-free differentiated?
  • [40:50] Dmitriy had a painful but fruitful path to financial freedom.
  • [43:00] They can because they think they can, and they can’t because they think they can’t!

Resources:

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