Financial Planning

Financial Planning

Financial Planning

Financial Planning Doesn?t Start One Day Before the April 15th Tax Filing Deadline.

Is it April 15th and you are dragging your tax files to your accountant, thinking, ?I wish I put money in a retirement account this year so I don?t have this huge tax bill now??Right?

So, let?s review what retirement accounts options you have, their pros and cons, and how to get started.

Note, laws change all the time and this information may be outdated if the contributor didn?t have the time to update it.


  1. No government filings.
  2. Pre-tax
  3. Only employers can contribute.
  4. For sole proprietors, partnerships, corporations, sole shareholders?of an?S corporation
  5. As of 2020 contributions cannot exceed the lesser of 25% of the employee?s compensation for the year or $57,000.
  6. The participant must be at least 21 years old, have worked for the employer for at least three during the previous five years, have received at least $600 in compensation from the employer during the current year
  7. Specific rules apply
  8. Establish by employer?s tax filing deadline, plus extensions.


  1. Employers must contribute annually.
  2. Employees can contribute $13,500 ($3,000 catch-up contributions) for 2020.
  3. Pre-tax
  4. For small companies with fewer than 100 employees. S-Corp, Solo, Partnerships, C-Corp.
  5. Employers may benefit from the SECURE Act tax credit that can offset setup costs.?
  6. Employees may benefit from savers credit? (up to $2,000 of contributions each year) if their income is up to certain limits.
  7. Not subject to income tax withholding, but?is?subject to FICA, FUTA, and RRTA.

Solo 401(k) plan

  1. $19,500, or $26,000 if age 50 or older (2020 contributions)
  2. Pre-tax
  3. Employer Contribution cannot exceed $57,000 (2020) (limits apply)?
  4. Contributions deadlines vary.
  5. Filing deadlines vary.?
  6. Solo 401k Contribution Calculation is Based on Business Structure: Solo, partnership, S-Corporation, C-Corporation.

SIMPLE 401(k)

  1. Similar setup as SIMPLE IRA.
  2. File a Form 5500 every year
  3. Pre-tax
  4. Can allow loans from the plan.
  5. For small companies with 100 or fewer employees, sole proprietors, partnerships, C corporations, S corporations
  6. Employee salary deferrals and employer contributions.
  7. Up to $13,500 in salary deferrals; $16,500 if age 50 or older
  8. Establish by October 1.

Tax Planning

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