Did you know there’s a tax credit available for small businesses that set up a new retirement plan? As a small business owner, which includes a self-employed business of one, you can claim a tax credit for part of the ordinary and necessary costs of starting a SEP IRA, SIMPLE IRA, or other qualified retirement plan. The credit equals 50% of the cost to set up and administer the plan and educate employees about the plan, up to a maximum of $500 per year for each of the first 3 years of the plan. You can even claim the credit for a prior year or carry it forward if needed. The credit is claimed on IRS Form 8881. More information about the credit can be found on the IRS website. Setting up a retirement plan is fantastic way to save and invest for retirement, and it can also provide helpful tax deductions.
If you’d like to talk with one of our CERTIFIED FINANCIAL PLANNER™ professionals about setting up a SEP IRA, SIMPLE IRA, or other qualified retirement plan, please feel free to contact us.