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!
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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.
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.
If you want free but possibly more ACCURATE internet tax advice, you might want to check out:
The people that post there usually know their stuff.
Did you get your CPA yet? Why not? Accounting firms will expect someone with an MS in Accounting to sit for the CPA. Get it.
Send out 200 letters to local CPA (sole practitioners) to see if they are looking to retire and sell their practice. Spend $30 to get a professional write the letter on guru.com, elance or some of the web writing services. Mailing out 200 letters on decent quality paper and envelop will cost $200.
You need to learn how to run an accounting practice from someone who is already doing it.
When he wanted to retire, the same applied with the gal that bought his practice.
Don’t borrow money, borrow hours. First, get a job, any job. The first 40 hours every week is used to pay your bills. The next 20 hours every week is spent building your business. As the business grows you detach from the job when you can fly on your own.
Then you will work about 60 hours a week at your new business for 3-5 years. If you are lucky, you may be able to start cutting back on your hours and eventually get down to 45 hours a week or so.
I built a career this way, and have watched others do the same. Starting a small business by borrowing is a recipe for disaster unless you already have clients and just need a physical plant and equipment to serve those clients.
The money in your 401k adds to your financial standing. Leave it there.
One of the most successful people I know started selling articles out of his garage. After 18 months I helped him rent his first retail space. 25 years later he is selling and retiring from a very successful business with gross sales of about $4 million a year. He worked about 60-70 hours a week for about 15 years. He could have worked less but he preferred to do the work of several people to speed the process.