Posted on 12/29/2010 7:16:46 AM PST by NYACC1978
Hello Freepers,
I have been a lurker since the late 1990s. I think 1999 was the first year I started lurking here. I have enjoyed getting news on Free Republic for years and I have always thought the discussions about news articles were quite interesting.
I have worked in various industries during my career. I worked as a computer programmer between 2002 and 2005. My second job out of college was called client services financial analyst. In 2007, I went back for my second master degree because I decided that it would be in my best interest to pursue accounting as a long-term career.
Since finishing my MS in Accounting in December 2008, I had a temporary consulting job, a volunteer accounting job, and an internship at Deloitte & Touche. Unfortunately, Deloitte did not offer me a full-time job at the end of the internship. My last day of traditional work was on April 1, 2010.
After months of unsuccessfully looking for a job, I decided on December 1, 2010 to start my own business. I am using my intelligence to figure out how to raise as much start-up capital as possible without having to take any loans.
I have started to do research about 401K loans and 401K hardship withdrawals. However, I am the CEO of my company and I cannot spend all my time researching this topic.
I need advice from tax lawyers and tax accountants.
If anyone wants me to elaborate on my situation, I will gladly share more details.
Thank you!
I need advice from tax lawyers and tax accountants.
If anyone wants me to elaborate on my situation, I will gladly share more details.
Thank you!
______________________________________________________
Their advice starts at $200 an hour. My advice is free. As you know... You get what you pay for.
Two things we need to know. How old are you and what is your 401k balance. Actually, there’s a lot more things we need to know. But that’s a start.
Creating a business out of thin air is risky. Borrowing money to finance such a project is not smart.
A local Fidelity office will give you 401k advice and fund suggestions for free.
Based on your post, you need professional advice.
I think you need to go back and get your Ph.D. If two MS Degrees in Accounting didn’t prepare you to solve this problem it is obvious you need more education.
However, let me make sure I understand the problem. You started the business on Dec. 1st but are now looking for start-up capital. Yet, as CEO of a company that has yet to really start-up you don’t have time to raise capital because of ..... ?? Therefore you need free advice on a subject that deals with a matter that two masters degrees in accounting should have taught you.
You said you had been a consultant but weren’t successful. Don’t you realize that being a consultant is a business. So, you have already failed in your own business so ....
Yep! I think more education is the answer.
Is that like a lawyer needing a lawyer?
If you start a business, and it goes bad, you lose your investment. If you used a 401k loan for start-up capital, and you can't pay it back, you'll also have the IRS to contend with, and pay off....word to the wise
Why raise money? You are a professional. Get some clients and get to work. Your biggest hurdle, under any circumstance, is lack of experience an reputation.
Big ideas and dreams are nice but the best and quickest way to get going is work.
If all else fails, consider getting back in contact with those you worked with at D&T. They’re planning on adding 11,000 new positions in 2011 and still have their recruitment bonus system going AFAIK. It’ll be the grindstone again, but you’d have a chance to sock money away for when business conditions improve.
If you really want to use your “intelligence,” I’d suggest you get the advice from a CPA. There are great minds on here but as another poster put it, you get what you pay for. It’s worth the money.
Oh, and as a former programmer, have you looked into XBRL? Lot’s of call for XBRL consultants right now....
Really? This is your vanity post? With all due respect, if you have an MS an accounting (with no CPA) and want to be a consultant, goog luck with that, and you’re asking advice from other accountants?
For $100.00/hour, I’ll google the answers for you since you’re obviously busy with your business.
Also, unless you actually contributed dollars to FR, you may want to consider going back to lurking, just a suggestion, this is not a pro bono advice site for the clueless.
Go to BenefitsLink.com and poke around the Q&A Boards. If that doesn’t help, e-mail me. I’m a 401(k) lawyer (have been for 22 years). I won’t charge you my hourly rate either. Cosider it a gift.
1. Get professional financial help.
2. They’ll probably tell you to take a loan against your 401K and not cash out.
That was a rather rude response.
Sounds like you’re looking to take a hardship from a former employer’s 401k,no? If this is the case, you can’t since you’ve severed service. You must “roll” these assets into your own IRA and take the cash out as a distribution which MAY be tax exempt based on hardship: medical, disability, etc. It will, regardless, count as income for the tax year.
If you’re under 591/2 you’ll also be penalized 10% of the amount for premature w/d from a qualified plan.
You’re no longer an active participant in a company 401(k), from what you’ve told us here, so you probably can’t take a loan or a hardship withdrawal from a 401(k). The former employer who sponsors the retirement plan only offers loans and hardship withdrawals to current employees.
You can roll the money to a self-directed IRA, but you can’t borrow from an IRA. You can do a 60-day rollover, but heaven help you if you don’t return all the money before 60 days are up.
You can cash out your old 401(k), but then you have to pay federal income tax, state income tax, and a 10% penalty for pulling the money out pre-59 1/2.
“a distribution which MAY be tax exempt based on hardship”
No, it MAY be PENALTY-exempt. In other words, if it’s a qualifying hardship, you won’t have to pay the 10% early withdrawal penalty. You’d still have to pay income taxes.
The IRS will get their money.
Any CPAs posting here? I think if he/she got a specialty in tax accounting - they should be able to find a job. Adding an MS is tax accounting might be 3 or 4 more courses at the most.
Another idea is to make a list of every CPA in a 20 mile radius. Send them a letter that they are looking to buy into a practice or slowly buy out a retiring CPA. The cost to mail 200 letters is less than $200. I did something like this years ago and it worked.
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