Self-Directed IRA vs. Self-Directed IRA LLC

QUESTION 1: Quick questions - where is my money kept in a self directed IRA?

ANSWER: The liquid funds in a self-directed IRA is kept with a custodian such as IRA Services Trust Company or Sunwest Trust, as all IRAs are required to have a custodian.

QUESTION 2: Do I have any control over my money?

ANSWER: You can control the investments in the self-directed IRA in one of two ways:

Option1: Direct the IRA custodian in writing to purchase alternative investments.

Option 2:  Place investment yourself on behalf of the self-directed IRA by forming an LLC IRA.  Commonly referred to as a self-directed IRA LLC, we can facilitate the setup of a self-directed IRA LLC in which the IRA would become a member and you would be listed as the managing member. As a result, a bank account with a checkbook feature would be opened at your local bank for the LLC IRA and the IRA custodian would then wire the IRA funds to the LLC bank account. Once funded, you as the manager of the IRA LLC would place investments by writing checks.

QUESTION 3: Can I save pretax money in both a solo 401k and self directed IRA if so what are my limits?

ANSWER: Yes you can contribute to both a Solo 401k and a self-directed IRA at the same time. The maximum contribution limit to a solo 401k for 2013 tax year is $51,000.  The maximum self-directed IRA contribution limit for 2013 is $5,500. However, you may not be able to take a tax deduction for the full amount IRA contribution amount if you make over a certain income amount, defined as phase-out range for IRA deductibility. 

To learn about the self-directed IRA contribution limits visit:
http://www.irs.gov/Retirement-Plans/IRA-Deduction-Limits

Thanks in advance.

Justin T. from Wisconsin