Many sole proprietors and small business owners agree on the following two issues: they pay too much in taxes and they have difficulty attracting and retaining good employees.
1) Have your business sponsor address a retirement savings plan
2) Consider setting- up a SIMPLE retirement plan (Savings Incentive Match Plans for Employees) available in two forms- SIMPLE IRAs and 401(k)s. SIMPLE plans are available to small businesses that do not maintain any other retirement plan. However, if your business has more than 100 employees you will not be eligible.
SIMPLE IRAs: Eligible employees (including yourself ) can elect to have a portion of their earnings withheld each pay period, limited to $11,500 in annual deferrals. The employees then direct how the deferrals will be invested within their own SIMPLE IRAs. Amounts withheld for the SIMPLE IRA reduce the employee’s taxable income and growth tax- deferred. The costs to set up and administer a SIMPLE IRA are minimal. However, as the employer you are required to make contributions into your employees’ SIMPLE IRAs on their behalf. You have the option of either contributing 2% of the wage of every eligible employee or making contributions up to 3% of the wages of the employees who participate in the plan.
To find out more about SIMPLE plans, give us a call.