Joel Libava
The human resources department over at the IRS (Internal Revenue Service) may be “getting busy,” in the next year or so. Real busy. They made need to hire more agents to start checking paperwork submitted by folks who’ve used a portion of their 401K’s or IRA’s to start a business…
Are you thinking about using a portion of your 401K/IRA to start your new franchise business? Well, you’re not alone.
One choice that is becoming increasingly popular is to use some of your retirement funds to finance a portion of your franchise business start-up.
To qualify, you must have at least one of these;
- IRA
- 401 {K}
- 403 {B}
- 457 {For Government agencies}
- SEP
- Simple Plan
- Annuity Plan
- Defined Benefit Plan
- Profit Sharing Plan
- Cash Balance Plan
- Money Purchase Plan
- Rollover Plan
- Employee Stock Ownership Plan
I’ve covered this topic several times in the past few years, and whenever I do, the comment engine gets pretty fired up. usually, the comments come from well-meaning accountants who are very risk-averse to begin with, and don’t have all the facts.
Well, the IRS’s little engine that could may be getting fired up too. That’s according to a recent post from Carol Tice over at AllBusiness.com.
Read “Tapping Retirement Money For Your Business? Be Careful” at AllBusiness.com
(I’m comfortable with these plans, as long as the paperwork is perfect, and the prospective business owner is in a good position to leverage his or her plan.)
Did you use a portion of your 401K/IRA to fund your business? Are you thinking about it?
Go here to learn how to do this right.
