Ways to Address Tax Savings Through Retirement Plans

Tips for Business Owners

 

There is a lot of volatility in the markets right now and you may be asking, “What can I do to take advantage?”

There are several ways, as a business owner, that you may reduce your taxable income. One of these strategies is through the implementation of retirement plans. Below you’ll find a few options.

  • 401(k) – Accelerate your contribution to your 401(k) by going online and increasing the percentage of your paycheck that is going into the 401(k). For example, if you are contributing 3%, go to the highest percentage you can handle. This may mean that you will get a lower paycheck, so make sure your cash flow can handle it. Please consult your tax advisor or financial planner to discuss.
  • Self-Employed Pension (SEP) Contributions – Make your SEP contribution now to take advantage of the market volatility.
  • IRA/Roth IRA Contributions – You can still make your 2019 contribution until April 1, 2020! And if you would like, you can also make your 2020 contribution.
  • Defined Benefit (DB) Contributions – Talk with your third party administrator (TPA) to see if the calculation for 2019 has been completed. If not, call and ask them to accelerate the process.

These are just a few of the ideas, and there may be others. Consult your financial advisor and tax professional to have these discussions.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal.

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