We Turn Taxes into Treasure

The primary reason clients that we work with set up a Qualified Retirement Plan is because they have a tax problem.  Paying taxes is not a bad thing…  it means you are actually making some money.  However, there is no reason to pay more in taxes than you are legally required to pay.  By setting up a Qualified Retirement Plan, you can take money that would have been owed to the Government in the form of taxes, and simply direct that same money into your own retirement account.

There are two primary forms of tax deductions that one receives when contributing to a Qualified Plan.

• The first is a personal deduction: For the money that is deferred from your W2 income into your retirement plan.  This is typically in the form of a 401(k) deferral and can be up to $16,500 or $22,000 for those over the age of 50.
• The second is a corporate deduction: Which happens when the company contributes money on behalf of the employees.  This can happen a number of different ways, including a matching contribution or a profit sharing contribution for Defined Contribution Plans or for any contribution made into a Defined Benefit Plan.   In a Profit Sharing Plan, the company can decide to contribute each year up to 25% of their payroll as long as each employee does not receive more than $49,000 (or $54,500 if over the age of 50) in total contributions including their deferral.   In a Defined Benefit Plan, contributions can be much higher (often into 6 figures) depending on the age and income of each employee.

Taxes are, and will continue to be a serious concern of most business owners, and there is no better way to significantly reduce taxes than with the help of a properly designed Qualified Retirement Plan.  If you would like to see how a Qualified Plan may reduce your tax liability, do not hesitate to Contact Us and one of our plan design specialists would be happy to design a plan specifically for your business.