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Small Business Owner Needs 401K Advice
Self | 12/29/10 | Self

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!


TOPICS: Business/Economy; Chit/Chat
KEYWORDS: 401k; congress; irc
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1 posted on 12/29/2010 7:16:48 AM PST by NYACC1978
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To: NYACC1978

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.


2 posted on 12/29/2010 7:20:50 AM PST by Responsibility2nd (Yes, as a matter of fact, what you do in your bedroom IS my business.)
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To: NYACC1978
If you're starting a business, your best bet is to start it on a shoestring. Do it out of your house until you get some cash flow. Once you have some cash flow you can get all the financing you want.

Creating a business out of thin air is risky. Borrowing money to finance such a project is not smart.

3 posted on 12/29/2010 7:24:24 AM PST by E. Pluribus Unum (DEFCON I ALERT: The federal cancer has metastasized. All personnel report to their battle stations.)
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To: NYACC1978

A local Fidelity office will give you 401k advice and fund suggestions for free.

Based on your post, you need professional advice.


4 posted on 12/29/2010 7:35:06 AM PST by Zathras
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To: NYACC1978
I am constantly amazed by these requests for help on FreeRepublic.com. You would think that if a Freeper could use the site, they would know about Internet searching. I typed "How to start your own business" into by Bing search window and got a lot of hits. The most interesting and applicable was http://myownbusiness.org/. This seems to be a whole nonprofit organization dedicated to helping people start their own businesses. You might try using these resources, instead of seeking them at "America's exclusive site for God, Family, Country, Life & Liberty constitutional conservative activists!"
5 posted on 12/29/2010 7:36:24 AM PST by SubMareener (Become a monthly donor! Free FreeRepublic.com from Quarterly FReepathons!)
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To: NYACC1978

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.


6 posted on 12/29/2010 7:42:24 AM PST by Mind-numbed Robot (Not all that needs to be done needs to be done by the government.)
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To: NYACC1978
"finishing my MS in Accounting in December 2008<<<<
>>>>>>I need advice from tax lawyers and tax accountants."

Is that like a lawyer needing a lawyer?

7 posted on 12/29/2010 7:48:23 AM PST by Deaf Smith (I spent all my money on women & booze, the other rest I just plain blew)
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To: NYACC1978
One basic thought to ponder...

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

8 posted on 12/29/2010 7:50:18 AM PST by ken5050 (I don't need sex.....the government screws me every day..)
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To: NYACC1978

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.


9 posted on 12/29/2010 7:51:53 AM PST by Sequoyah101 (Half of the population is below average)
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To: NYACC1978

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.


10 posted on 12/29/2010 8:00:29 AM PST by Eepsy
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To: NYACC1978

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.


11 posted on 12/29/2010 8:01:29 AM PST by Paved Paradise
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To: NYACC1978

Oh, and as a former programmer, have you looked into XBRL? Lot’s of call for XBRL consultants right now....


12 posted on 12/29/2010 8:02:55 AM PST by Eepsy
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To: NYACC1978

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.


13 posted on 12/29/2010 8:10:03 AM PST by IAmNotAnAnimal
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To: NYACC1978

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.


14 posted on 12/29/2010 8:10:36 AM PST by Buckeye Battle Cry (Conservatives want a CHOICE not an echo - No more RINOs!)
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To: NYACC1978

1. Get professional financial help.
2. They’ll probably tell you to take a loan against your 401K and not cash out.


15 posted on 12/29/2010 8:40:11 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: IAmNotAnAnimal

That was a rather rude response.


16 posted on 12/29/2010 8:41:40 AM PST by driftdiver (I could eat it raw, but why do that when I have a fire.)
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To: NYACC1978

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.


17 posted on 12/29/2010 8:46:51 AM PST by Dansong
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To: NYACC1978

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.


18 posted on 12/29/2010 8:49:55 AM PST by Choose Ye This Day ("As government expands, liberty contracts." -- Ronald Reagan)
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To: Dansong

“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.


19 posted on 12/29/2010 8:54:05 AM PST by Choose Ye This Day ("As government expands, liberty contracts." -- Ronald Reagan)
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To: Eepsy

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.


20 posted on 12/29/2010 8:54:51 AM PST by Frantzie (American TV = owned by the Saudis and elites - keep watching & losing your freedom)
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