There is a lot of uncertainty for Chicago business owners with the end of the year only days away. Most of them are waiting for the people we voted into office to actually get off their butt and do something about the problems America is facing. Everything is in such a flux with no indication on which direction is up. How will 2013 look for employee benefits? Clarity may not be too far. Business owners just need to know where to find it. An income tax-free strategy for retirement is a good place to start.
Main street businesses are the backbone of America. With the uncertainty, it is hard to plan your business goals and objectives for the new year and beyond. However, business owners can take advantage of the current tax law and make their money go even further and provide more benefits to their employees. Some programs are replacing old traditional retirement programs. The question business owners should ask is: Do I have the old or the new program?
There are businesses that are looking for ideas and strategies so they can move ahead. Businesses can have a competitive edge for hiring good employees while benefiting the business now and in the future (retirement).
The fiscal cliff is the hottest topic in the White House right now and there could be potential changes to the use of employee benefits and tax advantages. This gives business owners a huge reason to jump in now and use the current tax code to their advantage. Once the change occurs, it may be hard to reap such a huge benefit.
Business owners can take advantage of a pension plan with the owners, executives and key employees using tax code Section 79. This program allows you to add to or replace the current retirement or pension planning program in the work place. It also allows the business to take a deduction for paying for the benefit now and the benefit for the business owner or employee comes out tax-free in retirement.
For those who retire early, there are penalties with a traditional IRA or a 401K. These traditional retirement plans even allow you to save a little on income tax for the current year to then pay a much bigger tax when you finally retire and withdraw the money from the retirement program. Sound like a good deal? Look closer at the details. America knows they are destined for higher taxes due to the large national debt.
With section 79 pension planning, there are no penalties for early withdraw. You also do not defer the taxes until later. We all know that with todays financial crisis from our federal government, the fiscal cliff, the taxes will go up. Utilizing section 79 pension planning, businesses and their employees can lock in this tax advantage for retirement.
Since this is complying with IRS tax code, they require specific requirements. The details for these requirements will be handled by an experienced insurance agent and a third party administrator specializing in section 79 pension planning. Not all businesses will qualify based on requirements. Businesses can coordinate requirements to qualify with the right professional help.