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Stockpile more of your company plan benefits

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in Small Business Tax,Small Business Tax Deduction Strategies

It’s your company, after all, so you deserve the lion’s share of the retirement plan benefits. But it doesn’t always work out that way. Stringent anti-discrimination rules limit the amounts you can salt away in your own account even if you had to skimp in earlier years while you were building up the business.

Strategy: Add an age-weighted component to a profit-sharing plan. This feature enables the company to provide bigger benefits for employees based on age.

As with another qualified plan alternative—the comparability plan—an age-weighted profit-sharing plan enables a small business owner to keep more retirement benefits for himself or herself.

Here’s the whole story: The same basic rules that apply to regular profit-sharing plans generally also apply to plans using the age-weighted feature. The age-weighted plan uses a discretionary formula that provides more flexibility than most other types of qualified plans. For insta...(register to read more)

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