Financial Emergency! It is unpredictable yet it happens to all of us. Whether it’s college tuition for your daughter, unexpected medical bills from an accident in the yard, covering the higher than expected closing costs on your new home or avoiding foreclosure or eviction because spending got out of hand; you’re going to need money fast.
As one of the requirements for the tax exempt status of your Solo 401k, distributions of funds from your Solo 401k are limited to termination of employment, retirement, disability, death, plan termination or inservice distributions after age 59.5. Severe options for those needing a temporary cash infusion.
Your Solo 401k to the Rescue.
To cover those immediate situations, the IRS allows Solo 401k’s to provide two sources of funds: Number one is a loan of up to the lesser of $ 50,000 or one-half of your vested account balance. Number two is the hardship disbursement of salary deferral contributions for financial hardships.
Loans from your retirement account must meet the provisions of section 72(p) which requires that the:
ü Loan satisfies the five year repayment term requirement (15 years for residential loans).
ü Loan satisfies the level amortization schedule of consistent repayments.
ü Loan satisfies the enforceable promissory note contract agreement requirement, and
ü Loan satisfies the amount limitations of the lesser of $ 50,000 or one-half the vested account balance.
Loans are optional features of a Solo 401k plan and should a plan sponsor decide not to provide for loans because of the additional administrative complexity and cost, there remains the safe harbor Financial Hardship provisions. So called because limiting financial hardship requests to only preapproved IRS conditions eliminates the requirement to justify the decision to approve or disapprove the request based on facts and circumstances.
These financial hardships must satisfy one of the following IRS preapproved conditions:
ü Medical bills unreimbursed by insurance
ü Secondary Education for yourself, spouse or dependents
ü Purchase of your primary residence or
ü Avoid foreclosure or eviction
These hardship disbursements are not considered Solo 401k distributions with the option to be rolled over to IRAs or other qualified plans. But what happens if the solo 401k financial hardship does not meet one of these criteria? The request is denied and the consequences must be endured.
The IRS recognized that there were other significant events that could qualify as financial hardship and with IRS Regulation 2004-TD-9169, the IRS added two additional circumstances to the list of approved financial hardships.
1.Funeral Expenses and
2.Cost of Uninsured Repairs on your Primary Residence.
These two new additions bring the approved circumstances to a total of six.
The changes to the safe harbor hardship rules resulting from the IRS regulations is the second set of changes to the hardship rules since GUST. The first set of changes occurred when EGTRRA reduced the holdout period for elective deferrals from 12 to 6 months. Please note that all of the changes to the hardship rules since GUST apply only to plans that use the safe harbor criteria for hardship withdrawals.
To add these two additional situations to the financial hardship provisions of your Solo 401k requires an amendment. Such an amendment should adopt the safe harbor financial regulations by reference so that any future additions are incorporated without additional amendment.
Sabung Ayam
Dru Hill
High-school friends Larry "Jazz" Anthony, Mark "Sisqó" Andrews, Tamir "Nokio" Ruffin, and James "Woody Rock" Green formed Dru Hill in 1992, named in honor of their Baltimore neighborhood, Druid Hill Park. The vocalists performed at the music industry convention Impact '96 and were signed by Island not long after.
By late 1996, Dru Hill had released their self-titled debut album, produced by Keith Sweat, Stanley Brown, and Tim "Dawg" Patterson. The single "Tell Me" — culled from the soundtrack to the film Eddie — became a Top Five R&B hit and later went gold. Enter the Dru followed in 1998, peaking at number two on the Billboard album chart.
Despite Sisqó's solo success with "Thong Song," the group continued intact — along with new member Scola — and issued Dru World Order in 2002, two years after it was initially slated for release. Hits followed in 2005, eventually reaching three million in sales. Scola was later replaced by Antwuan "Tao" Simpson, and the group released its fourth studio album, Indrupendence Day, in 2010.
Address:
SABUNG AYAM