retirement plan - Linkenheimer LLP CPAs & Advisors

The Key to Retirement Security is Picking the Right Plan for Your Business

If you’re a small business owner or you’re involved in a start-up, you may want to set up a tax-favored retirement plan for yourself and any employees. Several types of plans are eligible for tax advantages.

401(k) plan

One of the best-known retirement plan options is the 401(k) plan. It provides for employer contributions made at the direction of employees. Specifically, the employee elects to have a certain amount of pay deferred and contributed by the employer on his or her behalf to an individual account. Employee contributions can be made on a pretax basis, saving employees current income tax on the amount contributed.

Employers may, or may not, provide matching contributions on behalf of employees who make elective deferrals to 401(k) plans. Establishing and operating a 401(k) plan means some up-front paperwork and ongoing administrative effort. Matching contributions may be subject to a vesting schedule. 401(k) plans are subject to testing requirements, so that highly compensated employees don’t contribute […]

By Linkenheimer LLP|2020-09-03T20:03:41+00:00September 5th, 2019|401k, retirement|0 Comments

Act Soon to Save 2018 Taxes on Your Investments

Do you have investments outside of tax-advantaged retirement plans? If so, you might still have time to shrink your 2018 tax bill by selling some investments • you just need to carefully select which investments you sell.

Try balancing gains and losses

If you’ve sold investments at a gain this year, consider selling some losing investments to absorb the gains. This is commonly referred to as “harvesting” losses.

If, however, you’ve sold investments at a loss this year, consider selling other investments in your portfolio that have appreciated, to the extent the gains will be absorbed by the losses. If you believe those appreciated investments have peaked in value, essentially you’ll lock in the peak value and avoid tax on your gains.

Review your potential tax rates

At the federal level, long-term capital gains (on investments held more than one year) are taxed at lower rates than short-term capital gains (on investments held one year or less). The Tax Cuts and Jobs Act (TCJA) retains the 0%, 15% and 20% rates on long-term capital gains. But, for 2018 through 2025, these rates have their own brackets, instead of aligning with various ordinary-income brackets.

For example, these are the thresholds […]

By Linkenheimer LLP|2018-12-19T17:49:08+00:00December 19th, 2018|investment, retirement, tax planning, year-end|0 Comments

April 1 Required Minimum Distributions Deadline Approaching

Individuals who attained age 70 1/2 in 2015 must begin taking Required Minimum Distributions (RMDs) from their traditional IRAs by 4/1/16. Qualified retirement plan participants (e.g., 401(k) participants) also must begin taking RMDs if they reached age 70 1/2 or retired in 2015, whichever came later (except for 5% owners, who are subject to the IRA rules). Note that a qualified plan may require all employees (including non-5% owners) to take RMDs by April 1 of the year following the year the employee attains age 70 1/2. If you have any questions about the deadlines or RMDs, please contact your Linkenheimer CPA.

By Linkenheimer LLP|2020-09-03T20:05:14+00:00March 29th, 2016|ira, retirement|0 Comments