Don Dwoske wrote:

- quote -

Nor are you likely to--the big problem is both finding a plan that fully
qualifies that you can adopt *AND* then keeping the plan up to date for
the inevitable law changes that will take place in the future. While,
in theory, you can adopt a custom plan and *NOT* go for a determination
letter, you will end up admitting that fact on the 5500, which pretty
much tells the IRS it's very likely the could disqualify the plan if
they examined the document (and, believe me, you *don't* want
disqualification <grin> ).

If you truly want to do this, you should consult with a third party plan
adminstration firm and look at simply signing up with them for their
document (and update to the same) only.

This all presumes (which is a *big* presumption) that you will otherwise
be able to operate the plan in accordance with the plan document and any
law changes you must comply with.

I'll put it this way--I've been involved with qualified plans for the
past 20 years and have lectured professionally on them twice in the past
year. *I* wouldn't try to judge if a plan I found "free" online would
be a qualified--at the very least I would get my plan from someone who
has qualified their prototype plan and be sure I stayed on their list
for any required updates.

---
Ed Zollars, CPA
Phoenix, Arizona

I've been considering setting up an Individual 401k plan
for my own consulting business (an LLC). Since we have
no employees, just two partners, we will qualify for this.

I'd like to setup and manage my own plan.

Limitations of third party trustees (only
certain mutual fund families / no real estate investment /
/ fees for setup and loans) are leading me to do this
myself. We've a modest income and I'd like flexibility of
investment options and very small fees.

Would anyone recommend against doing this? I'd give myself
enough study to understand all the tax issues and requirements,
issue a plan document, document all the contributions and
transactions, etc.

I'd also like to use an self-directed online brokerage,
such as Ameritrade to hold my savings. I could set this up either
as an individual account, or as a partnership account - but
not sure what to do yet.

Can all of what I'm describing be done by myself without too
much trouble, and/or potential IRS administrative headaches?

I have yet to come across any sample plan documents online either,
so links to those might also be helpful.

Thanks for advice,
Don