Have you procrastinated about setting up a tax-advantaged retirement plan for your small business? If the answer is yes, you are not alone.
Still, this is not a good situation. You are paying income taxes that could easily be avoided. So consider setting up a plan to position yourself for future tax savings.
For owners of profitable one-person business operations, a relatively new retirement plan alternative is the solo 401(k).
You may also see the solo 401(k) called a “mini-401(k),” a “uni-401(k),” a “one-participant 401(k),” an “individual 401(k),” and so on.
All these terms are meant to describe a 401(k) plan that covers only the business owner and that is therefore exempt from the nasty non-discrimination and coverage rules that afflict multi-participant 401(k) plans. For this article, we will stick with the solo 401(k) nomenclature.
The main solo 401(k) advantage is potentially much larger annual deductible contributions to the owner’s account—that is, your account. Good!
This article explains when a solo 401(k) might be your best tax-favored retirement plan option. Here goes. ... Log in to view full article.