There are many types of retirement plans available to taxpayers (business owners and employees) such as:
5-Employer Sponsored Pensions and Retirement Plans
The IRS tax rules for these plans help employees and business owners save for their retirement (and at the same time reduce their income taxes).
Any kind of business, sole proprietorship, partnerships, limited liability company, and C or S corporation can set up a tax-advantaged retirement plan for their employess, and for their owners.
Tax rules vary depending on the type of retirement plan, but essentially, all plans (except ROTH IRA's) allow both employees and business owner to make tax-deductible contributions to their plan each year. The earnings on the contributions are tax-deferred while they ramain with the plan. Taxation occurs when the employee or business owner takes a distribution.
IRS Publications 560, 590, and 4222 are excellent resources to get an overview of the various plans and applicable rules that must be followed. You can call the IRS at 800-829-3673 to receive FREE copies (the IRS provides FREE copies for hundreds on tax topic publications) in the mail.
Because IRS rules for retirement plans are generally complex (and confusing), and often change over the years. it pays to seek professional assistance if you're considering starting a plan (or even if you currently have one).
Even the slightest mistake with retirement plans, (and there are many that can be innocently made) can cost hundreds, even thousands of unnecessary dollars in additional taxes, IRS penalties and interest charges, even a tax audit. And, once made. these mistakes are often very difficult, if not impossible, to undo, and the damage is done.
When used correctly, retirement plans are a triple-win situation: you save for your retirement, you pay less income tax, and you keep more of your hard-earned money!
CALL 561-746-1926 or 561-339-8102 NOW if you have any questions or concerns or would like to schedule a FREE, Confidential, No-Obligation Tax-Saving Consultation.