By setting up the right type of 401(k) for your specific pharmacy, you can maximize your savings for retirement while increasing tax deductions for your corporation. A happy side-effect of doing this is increasing your ability to better attract, retain, and reward your most valuable employees. Below are different ways to optimize your 401(k) to save more while increasing tax deductions.
Increased deferrals. Deferral limits for 2018 in 401(k) increased.
- Each participant will be able deferral $18,500 from w2 income (additional $6,000 if over age 50)
- Deferrals can be either pre-tax or ROTH
* Pre-tax deferrals allow participants to reduce individual’s taxable income for that given year
* ROTH deferrals (paying tax now) allow contributions to grow tax free
Safe-Harbor Matching or Contributions
- By setting up a Safe-Harbor match or contribution for all participants, allows owners to reach the personal maximum deferral limits without being dependent on participation of other employees.
- Safe-Harbor matching and/or contributions are tax deductible to corporation
Profit-Sharing Contributions
- Allows owners the discretion from year to year to exercise an additional employer contribution to themselves and their employees
- Ability to achieve a total of $55,000 in tax deferred savings for owners in 2018 ($61,000 if over age 50)
- Profit-Sharing contributions are tax deductible for the corporation
- There are many customizable options that can be made to allow:Increased benefit towards individual owners
* Flexibility in increasing benefit to key employees
* Flexibility to increase amount given or not given from year to year
Cash-Balance 401(k) plan
- Need to save more?
- Need more Tax deductions?
* Learn more about how a Cash-balance plan can increase total deductions to well over $250k+, while owners receiving the majority!
Pharmacy401k takes the time to educate independent community pharmacy owners on what options are available, while creating a custom plan to reach their individual goals. Learn more on how you can increase your personal savings for life after pharmacy, give more to your employees, and give less to the IRS for 2018 and on. For more information on our custom approach and to discover your pharmacy's optimal plan, click here to download our company census tool or contact us by emailing tyler@pharmacy401k.com or call Tyler Campbell at 843-720-3756.