✅ The 4th quarter is wrapping up in 2020, and that means if you’re a small business owner, you’re a whole lot more concerned with tax strategies and planning than you are with the holidays and New Year’s celebrations.

✅ In fact, just about every business owner, large or small, is darn-near obsessed with reducing their taxes, and rightfully so.

✅ Well, one of the best ways to reduce your tax burden AND plan for the future is to contribute to one of two specific retirement accounts.

✅ The two options that will help you from a tax perspective are contributing to a SEP IRA or a Solo 401k plan. No matter if you’re a sole proprietor, S Corp, LLC, have one employee or one hundred, this may be a valuable tax planning tool.

✅ With a SEP IRA…
You can save up to 20% of your net profit
To lower our taxable income base
Contribute up to $59,000 for an individual
And do so up to the day you file your taxes!

✅ With a Solo 401k plan…
There are two aspects, Employer Contributions and Employee Contributions
You can contribute $18,500 as employee
But 20% of your business income as an employer
Or defer tax savings with a Roth Solo 401k
Contribute up to $59,000 max
The deadline to set it up is Decembers 3t1

✅ However, with a SEP IRA, there are concerns about paying self-employment tax, so many of my clients benefit and save more with a Solo 401k plan.

✅ As always, we really need to look at your situation, goals, and circumstances before we decide what is best for you.

✅ So, consult your CPA and let’s schedule and appointment to get your all set up…before the holiday season passes and it’s too late!…(read more)

LEARN MORE ABOUT: IRA Accounts

CONVERTING IRA TO GOLD: Gold IRA Account

CONVERTING IRA TO SILVER: Silver IRA Account

REVEALED: Best Gold Backed IRA

Planning for Tax Savings with a Solo 401(k) or SEP IRA

Tax savings is a key consideration for any business owner or self-employed individual. One of the most effective ways to reduce your tax burden while saving for retirement is by utilizing a Solo 401(k) or SEP IRA.

A Solo 401(k) is a retirement savings plan specifically designed for self-employed individuals and small business owners with no full-time employees. It allows you to make contributions both as an employer and as an employee, providing the potential for significant tax savings. As of 2021, the maximum contribution limit for a Solo 401(k) is $58,000 for those under 50 and $64,500 for those 50 and older.

On the other hand, a Simplified Employee Pension Individual retirement account (SEP IRA) is another popular retirement savings option for self-employed individuals and small business owners. Contributions to a SEP IRA are made solely by the employer, and the maximum contribution limit for 2021 is 25% of an employee’s salary or $58,000, whichever is less.

Both the Solo 401(k) and SEP IRA offer tax advantages, such as potential tax deductions for contributions and tax-deferred growth of investment earnings. By making regular contributions to these retirement accounts, you can reduce your taxable income and potentially lower your tax bill each year, while preparing for a financially secure retirement.

When planning for tax savings with a Solo 401(k) or SEP IRA, there are a few important considerations to keep in mind. Firstly, it’s crucial to stay informed about the contribution limits and deadlines for each type of account, as these may change from year to year. Additionally, understanding the investment options available within these accounts can help you make informed decisions that align with your overall financial goals.

Furthermore, it’s essential to work with a financial advisor or tax professional to ensure that you are maximizing the tax benefits of these retirement accounts. They can help you navigate the complex tax laws and regulations, as well as develop a strategic plan for your retirement savings that takes advantage of all available tax incentives.

Finally, it’s important to regularly reassess your retirement savings strategy and make adjustments as needed. Your financial situation and retirement goals may change over time, so staying proactive and making informed decisions about your retirement savings can help you achieve optimal tax savings and long-term financial security.

In conclusion, a Solo 401(k) or SEP IRA offer attractive options for self-employed individuals and small business owners looking to save for retirement while minimizing their tax liability. By taking advantage of the tax benefits offered by these retirement accounts and staying informed about the relevant regulations, you can effectively plan for tax savings and lay the groundwork for a financially secure retirement. Working with a knowledgeable financial advisor or tax professional can further enhance your ability to maximize tax savings and make informed decisions about your retirement savings strategy.