Certified in wealth preservation, California-based estate planning attorney Mark Ziebold provides high-net-worth clients with expert counsel regarding how long-term financial planning and business succession plans fit into their comprehensive estate plans. Mark Ziebold is highly knowledgeable in asset protection strategies suitable for business owners and their families, including profit-sharing plans.
Profit-sharing plans allow small business employers to contribute to employee retirement plans based on the company’s annual revenue. These plans can easily be added to an existing employer-sponsored 401(k) plan, often at no additional charge. Under a profit-sharing 401(k) plan, employers can decide to contribute a percentage of pre-tax profit evenly amongst employees, or a varied amount based on age or salary.
While this benefit is attractive for employees, it is also advantageous for business owners. In addition to being cost-effective, profit-sharing plans allow small business owners to reduce their tax liability. Since employers can contribute up to $62,000 in tax-deductible benefits for each eligible employee, it can significantly lower taxable income.
Profit-sharing plans allow small business employers to contribute to employee retirement plans based on the company’s annual revenue. These plans can easily be added to an existing employer-sponsored 401(k) plan, often at no additional charge. Under a profit-sharing 401(k) plan, employers can decide to contribute a percentage of pre-tax profit evenly amongst employees, or a varied amount based on age or salary.
While this benefit is attractive for employees, it is also advantageous for business owners. In addition to being cost-effective, profit-sharing plans allow small business owners to reduce their tax liability. Since employers can contribute up to $62,000 in tax-deductible benefits for each eligible employee, it can significantly lower taxable income.
