Retirement Plan Article

Qualified Plans = Tax Savings
by Judy Henry

Year-end will be here before you know it. If you keep your business records on a calendar year basis, now's the time to start looking for ways to minimize your business' income taxes.

A qualified retirement plan is an effective way to reduce current tax liability. A qualified plan may offer you, your business, and your employees these tax benefits:

Employer contributions are tax-deductible to your business.
Contributions aren't included in employees' current incomes. They are taxed when they're distributed—generally at retirement when income tax brackets are often lower.
Earnings on contributions accumulate tax-deferred.
Annual administrative expenses paid separately by your business are tax-deductible.

To gain the benefits of a qualified retirement plan for the next tax year, start planning now. Generally, the structure of your business determines when you must adopt and fund your plan:

Sole Proprietorship or Partnership - Establish and sign your plan by December 31 and make contributions by your tax-filing deadline, plus extensions (normally April 15).
Corporation - Establish and sign your plan by your fiscal or plan year-end and make contributions by your tax-filing deadline with extentions.

If you want to reduce the amount of taxes your business must pay, now's the time to think about implementing a qualified retirement plan. By doing so, you create valuable savings and lasting benefits for yourself, your business and your employees. See me for more information on qualified retirement plans and how they may help your business. Judy Henry 714-960-5854 www.henryswww.com.

This presentation/publication is believed to provide an accurate and authoritative information in regard to the subject matter covered. The accuracy of the content is not guaranteed, and it is provided with the understanding that Principal Life Insurance Company is not rendering legal, accounting, tax or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Principal Life Insurance Company, Des Moines, IA 50392

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