Thanks to the new Tax Reform, small business owners now have the chance to take advantage of a new tax benefit: the Qualified Business Income (QBI) deduction. But how does the QBI deduction affect 401(k) and other retirement savings vehicles, and which makes the most sense for owner-only businesses?
Profit sharing seems to become more and more buzzworthy around this time every year—after the fiscal year has concluded but before businesses are required to file their corporate taxes. But profit sharing plans are subject to legal regulations, so before deciding whether to offer profit sharing this year, small business owners will want to make sure they are familiar with the ins and outs of 401(k) profit sharing.
It’s hard to believe, but the fourth quarter of 2018 has already arrived. And as year-end approaches, many business owners begin scrambling to find ways to maximize potential tax benefits for the year. Perhaps your financial advisor suggested saving any big company purchases for the end of the year in a last-ditch effort to lower your profit margins and drop your business into a lower tax bracket. Or maybe you instead decided to ramp up your employees’ Christmas bonuses right at year-end to lower your tax rate. But if you’re looking for the best way to maximize your business’s tax benefits for the year, while also making a tangible difference in your employees’ financial future, starting a 401(k) or similar retirement plan should be front and center in your mind.
Small business owners often enjoy perks that their corporate counterparts may not always have the chance to experience; a strong sense of community, a family-like atmosphere, and the ability to make each employee feel as though their voice is truly heard are all experiences that can be unique to the small business culture. But many small businesses fall behind when it comes to the benefits that are offered, especially when looking at retirement savings. And that alone can be a serious issue.
Humans feel stress on a daily basis. It’s a part of life, but that doesn’t mean it needs to creep into the workplace. Outside stress can cause a serious lack of focus among affected employees, and one of the biggest stressors is money. In fact, nearly one in three employees reports that personal financial issues have been a distraction at work. And one of the biggest financial concerns among employees is not being able to retire when they want.
You’ve done the research and you’ve seen the statistics. More than 40% of full-time employees do not have access to a 401(k) savings plan, and you’ve made a promise that you and your employees are going to be part of the other 60 percent. You’ve found a plan that you think will work for you, and you’re fired up and counting down the days until you can make that first contribution and “officially” begin your road to retirement. But, does your new 401(k) plan look out for YOU? Here’s how to tell.
As a 401(k) plan sponsor, one responsibility you face is to make sure that you and your employees stay educated and equipped with the right tools to put everyone on a secure path to retirement readiness. But how do you do this while running your 401(k) plan with maximum efficiency? Wouldn’t it be great if one simple solution – paired with your current payroll processing – could process and update records, handle participant contributions, and stay compliant with whatever new rules and regulations get tossed your way?
Sponsoring a workplace 401(k) plan can be a little unnerving if you’re not a financial expert or you’re apprehensive about the decisions you’re asked to make. With all the recent hullaballoo about new fiduciary standards and so many rules and regulations to follow, many 401(k) plan sponsors feel overwhelmed without help on their side. Luckily, help is available.