Act as Trustee for your Individual 401k

With an Individual 401(k), you do not need to have a Custodian or 3^rd party administrator; you may act as your own trustee. Acting as your own trustee is not as difficult as it sounds. You will simply be responsible for the day-to-day operations of the 401(k).

What type of things are involved with acting as your 401(k)s trustee?

• Setting up the 401(k) checking account with a financial institution ? The 401(k) will need a checking or brokerage account where all the 401(k) funds will be held. This can be at any financial institution of your choice and will be set up in the name of the 401(k) using its EIN.
• Rolling over funds into the 401(k) ? Sunwest Trust will provide you with all the forms that you will need to administer the plan yourself. You will use the Rollover Request Form to rollover funds from previous IRAs or 401(k)s.
• Keeping track of investments ? We recommend that you keep a spread sheet on Excel or use something like Quick Books to keep track of all of your investments. It will also be imperative that you keep track of what contributions made to the account are traditional (tax-deferred) contributions and those that are Roth (after-tax) contributions.
• Signing on behalf of your 401(k) for investments ? As trustee of the 401(k), you will be responsible for signing all investment documents. The investments will be purchased in the name of the 401(k), but you will sign as trustee.
• IRS filing ? You are not required to file anything for your 401(k) until it has reached a value of $250,000. When your 401(k) reaches $250,000, you will be required to file a 5500 EZ on an annual basis for the 401(k).

These are not all of the things required of the trustee, but this is a basic list. If you have questions, please speak to a CPA or tax professional.

Source: http://www.sunwesttrust.com/sunwest-trust-news/act-as-trustee-for-your-individual-401k.html

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