Bookkeeping

401k Question

This was a question from a client today.

“I was wondering if you could advise me on a tax question:

I was considering setting up a solo 401k through Vanguard. I asked my tax accountant and they said it was a good idea. However, it often feels like when I ask them questions, they are more interested in keeping me reliant on them instead of empowering me.

I know that contributing to the 401k can be written off and lower expenses”

in progress 1 Answer

Answer

  1. 74 Answers

    Hi, there are definitely tax advantages in contributing to a 401K account. The contributions can reduce your tax liability. I’m not sure how opening the Vanguard account keeps your client dependent on the tax accountant. Your client can set the account up with Vanguard on their own as well as determine how much and when they would like to contribute to the account. A 401K is not only a great way to save money, as I mentioned the contributions can assist in lowering your client’s tax liability. Your client should note that when they decide to withdraw the funds they may be taxed at that time depending on how the funds will be used.

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