Tag: texas outsourced financial team

Tax Deferment: Use Retirement Accounts to Your Advantage

Posted on by Bryan Polozola

Small business owners know a thing or two about sacrificing for the greater good of the company. While being a small business owner has a multitude of perks, owners give up the benefit of tax-deferred personal retirement accounts. However, there are options as an employer that not only yield tax benefits for you, but will be advantageous in attracting and keeping great employees. Consider one of these retirement plan options for your company today:

 

Simplified Employee Pension (SEP) IRA

 

Working much like a traditional IRA, a SEP account gives you the benefit of deferring taxes on 25% of your income, with a maximum allotment of $49,000. A SEP IRA is perfect for those who have a full-time job and run their business on the side via 1099 income or moonlighting because it does not interfere with your eligibility for your company’s traditional 401K plan. The drawbacks include lack of flexibility (all employees must receive the same amount), no employee contribution options, and 25% of income cap (which could hit sooner if you make less than $200K).

 

Savings Incentive Match Plan for Employees (SIMPLE) IRA

 

The SIMPLE IRA is similar to the SEP IRA, but mandates a lower maximum contribution rate ($11,500-$13,500 based on age). Due to the lower maximum contribution rate, a SIMPLE IRA is not recommended for most small business owners, as a SEP IRA or 401(k) plan just makes more sense.

 

Individual 401(k)

 

An individual 401(k) is set up with one beneficiary, the business owner himself. Like the SEP IRA, the maximum contribution is $49,000; however, there is the benefit of contributing 100% of the first $16,500 of your self-employment income. Consider this option if you make less than $100k and want a way to maximize all retirement sources.

 

Not sure which plan is right for enjoying small business tax deferment and added retirement savings for you and your employees? Give Bryan Polozola at NexGen Finance Solutions a call today at 214-629-0100 or via email at bryan@nexgenfinance.com. We are your one-stop financial advisors in Dallas.

 

Are you ready to meet YOUR new finance team?