What You Need to Know About Early Distributions

Instead of taking early distributions of your hard-earned dollars to fund the next stage of life as a business owner, why not explore the BORSA Plan instead? The Business Owners Retirement Savings Account Plan, offered by DRDA CPA firm, is available to qualified individuals nationwide as an alternative source of funding for a start-up business or franchise.

 The BORSA Plan is a perfectly legal and safe way to use your retirement income to finance your new business start-up costs. You don't have to pay any taxes or early withdrawal penalties. You don't have to take a loan against your retirement account. You can rollover your retirement account into a BORSA plan. A BORSA is a Business Owner's Retirement Account and you use your current retirement account to create it. You can then use your BORSA account to finance your business start-up. Your dream of going into business doesn't have to be just a dream. At DRDA CPAs, Suzy Granger and her staff are CPAs and financial planners who know the ins and outs of a BORSA plan. They can help you set one up and finance your new business opportunity.

Many people rely on taking early distributions of their retirement plans when they are looking for funding to start a new business. The problem is, you pay a hefty penalty for early distributions. An early distribution is a withdrawal from a qualified retirement plan, such as a 401(k), 403(a), 403(b), IRA (other than an education IRA) or a SIMPLE IRA, before the age of 59 ½ .

Retirement plans are set up to fund your retirement, not as a funding source for other needs in your life. In order to encourage you to leave your money in your retirement account, you are charged an early distributions penalty of 10%, except under certain circumstances. You also need to pay income tax on the funds you withdraw.

There are certain situations where the early distributions penalty does not apply, such as:

• distributions to beneficiaries after your death

• distributions due to total and permanent disability

• distributions made as part of a series of equal periodic payments in a non-IRA plan, but you must sever ties with your employer first

• distributions due to an IRS levy, distributions to qualified military reservists who were called to duty between September 11,2001 and December 31, 2007

• distributions to pay for medical expenses greater than 7.5% of your AGI

There are also a few other exceptions for both IRA plans and non-IRA plans, but like these above, none of these exceptions have anything to do with starting a new business.

You can fund your BORSA with a 401(a) pension, a Profit sharing 401(k)
a 403(b), 457, or an IRA rollover Small business owners just like you have used a BORSA plan to finance their business start-up all across the country. Why wait any longer? Call the DRDA CPAs at 281-954-6040 and find out how you can roll your retirement account into a BORSA plan with no fees for early distributions, no taxes and no penalties.