If you are a business owner and looking to reduce your taxable income,
Defined Benefit ("DB") Plans just might be your answer.
If you are a business owner and looking to reduce your taxable income, Defined Benefit ("DB") Plans just might be your answer.
Think of a "Defined Benefit Plan" as a custom-built 401K, which sits on top of a traditional 401K, that then allows you to increase your contributions to a tax-deferred account up and beyond what a traditional 401K permits.
DB plans can help you in two strategic ways:
They can help you reduce your taxable income by increasing the amount you can legally contribute to a tax-deferred account.
By increasing your tax deferred bucket, you can use that bucket as an important stepping stone to ultimately increase your tax-free bucket, which is a key objective of forward-looking tax planning.
Like anything, the devil is in the details. If your business is thriving, throwing off all kinds of cash flow and you want to find a clean and legal way to reduce your taxable income and be smart about how you do it, a DB plan just might be your answer.
One of the most overlooked details when implementing a DB Plan is who you choose to be responsible for all of the DB Plan documentation and compliance. Having the right firm to administer your Plan can make an enormous difference and make your life much easier.
Why not start today and cut your tax bill?