As the owner of the business, you may feel that you deserve more retirement plan benefits than other employees. But tough nondiscrimination rules can work against you … unless you’re clued in to one of the best-kept secrets in the tax law.
Strategy: Set up an “integrated retirement plan.” This plan integrates your retirement plan contributions with Social Security tax payments to effectively reduce the amount your company must contribute on behalf of the rank-and-file.
As a result, the higher-paid employees in your company—like yourself—will be entitled to a larger piece of the pie.
Does it sound too good to be true? It’s not. An integrated retirement plan qualifies as “permitted disparity” under a special tax law exception. The plan isn’t considered to be discriminatory even though only a select few or even only one employee may benefit from it.
Here’s the whole story: Employers are required to pay their fair share of FIC...(register to read more)