July 7, 2016
Let’s say you are over age 50, receive $100,000 in compensation from your corporation, and want to contribute the most you can to your retirement account.
INDIVIDUAL 401(k): $49,000
You can make a salary-deferral contribu- tion of $24,000 (the maximum amount for someone age 50 or older). Plus, you can make a profit-sharing contribution of $25,000 (25% of your $100,000 compensation), bringing your total contribution for the year to $49,000.
SEP-IRAs limit employer contributions to 25% of compensation and do not allow salary-deferral contributions, so the most you can contribute in this example is $25,000.
SIMPLE IRA: $18,500
You can contribute up to $15,500, which includes a $3,000 catch-up contribution. Your business can also contribute, adding another $3,000 (3% of your compensation) at most to your total contribution.
If your goal is to contribute large amounts to your retirement plan or to make Roth contributions, ask your financial advisor about the Individual 401(k). Your advisor can review your financial situation and goals and help you choose the retirement plan that is right for you.
This tax season is an important one for many business owners because it’s the first that will be impacted by the Tax Cuts and Jobs Act (TCJA). How big of an impact is dependent on your unique situation. We’ve compiled this short list of provisions that may affect the business community:
According to Forbes.com, Super Bowl viewers traditionally load up on millions of pounds of less-than-healthy foods during the big game—including ribs, pulled pork, tortilla chips, nuts, popcorn and bacon—all washed down with beer (the Super Bowl beverage of choice). If you are trying to stick to your New Year’s resolution to eat better, consider a few healthy substitutes for the traditional Super Bowl eats:
The combination of running a business and your life and preparing for tax time can drive some people into a slight panic. But no need to get stressed if you are prepared. Now is the time to start organizing all documents required to file your tax return.