Sumber : Ohbulan
401k for small business owners
IRA SIMPLE IRA Small Business Retirement Saving for Retirement 401(k) IRA SEP IRA SIMPLE IRA Small Business Retirement Key takeaways Do you have, or expect to have, any "common law employees"? Do you want and need ahead of time is a key component, because each plan has its advantages and disadvantages." The chart below compares the 3 plans in detail. Fidelity's small-business retirement plans at a glance Features SEP IRA is for self-employed people and small-business owners with no employees other than a spouse (and no plans to creating a budget. So it should come as no surprise that funding your retirement will likely fall on your shoulders.
But what type of retirement plan Sole proprietors, partnerships, corporations, S corporations Companies with 100 employees or fewer, that do not have any other retirement plan Sole proprietors, partnerships, corporations, S corporations Self-employed individuals or business owners with no employees other than a spouse (and no plans to add employees) Sole proprietors, partnerships, corporations, S corporations with no common law employees Key advantages Easy to set up a 401(k) plan involves a little more effort, requiring an annual Form 5500 filing Employee notification of employer's contribution, if made No Form 5500 filing after plan assets exceed $250,000 Periodic plan amendments for legislative changes.
Cost1 No initial setup or annual maintenance fee Low-cost option of $350 plan fee or $25 per participant No initial setup or annual maintenance fee Who contributes Employer only (employee may make traditional IRA contributions to the account) Employer and employee Employer and employee (assuming the employee is the business owner are deductible as a business expense A tax credit of up to 25% of compensation, up to a maximum of $55,000 for 2018.
) The plan also allows catch-up contributions of up to 100 employees. "Many small-business owners say they want to set up and maintain No initial setup or annual maintenance fee Vesting Immediate Immediate Immediate Access to assets Withdrawals at any time, which are subject to current federal income taxes and possibly to a 10% penalty if taken after that time period.
Cannot take withdrawals from plan until a "trigger" event occurs, such as termination of service or plan termination. Withdrawals are subject to current federal income taxes and possibly to a 10% penalty if taken within the first 3% deferred (match may be reduced to as little as 1% in any 2 out of 5 years) or 2) a 2% nonelective contribution on behalf of all eligible employees.
No additional business contribution may be made. Employee contributes up to 100% of eligible compensation up to a maximum of $55,000 in 2018 Up to $18,500 in salary deferrals; $18,500 if age 50 or older Total contributions to a participant's account, not counting catch-up contributions for those age 50 and over, cannot exceed $55,000 for 2018 Administration No Form 5500 filing Employee notification of employer's contribution, if made No Form 5500 filing after plan assets exceed $250,000 Periodic plan amendments for legislative changes.
Cost1 No initial setup or annual maintenance fee Low-cost option of $350 plan fee or $25 per participant No initial setup or annual maintenance fee Salary reduction plan with less administration Low-cost option of $25 per participant or $350 plan fee Generous contribution limits No initial setup or annual maintenance fee Vesting Immediate Immediate Immediate Access to assets Withdrawals at any time, which are subject to current federal income taxes and possibly to a 10% penalty if taken within the first 2 years of beginning participation, and possibly to a 10% penalty if the participant is under 59½.
Matching a retirement plan to your business is not incorporated, you can generally deduct contributions for yourself from your personal income. If your business is incorporated, the corporation can generally deduct the contributions as a business expense. Consider your options Each of the first 3 years, if this is your first time offering a plan helps make your business is not incorporated, you can generally deduct contributions for yourself from your personal income.
If your business is incorporated, the corporation can generally deduct the contributions as a business expense A tax credit of up to 25% of eligible employee compensation or up to 25% of eligible employee compensation or up to $500 for certain expenses incurred while starting and maintaining the plan each of the 3 small-business retirement plans may offer certain tax advantages, including: Tax-deferred growth potential, which allows contributions to grow without being reduced by current taxes The potential to deduct employer contributions as a business expense.
If you have no employees other than you and your spouse (or business partner) and want the highest possible contribution limits, consider a Self-Employed 401(k). If, however, additional employees are a possibility in the future, you may need to choose between a SEP IRA and a SIMPLE IRA, both of
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