Last Minute Year-End Retirement Deductions for Small Business Owners

You still have time before December 31 to take steps to help you fund your retirement. Here are four strategies that might help.

Establish Your 2020 Retirement Plan

Do you have your employer’s retirement plan in place? If not, and you have some cash on hand, get that retirement plan in place now so you can obtain a tax deduction for 2020. For most defined contribution plans, you (the owner-employee) are both the employee and the employer, whether you operate as a corporation or a proprietorship. That is a good thing because you can make both the employer and the employee contributions, allowing you to put a good chunk of money away.

Your plan document defines when you can make employee and employer contributions that will result in 2020 tax deductions. Make sure you know exactly when to make those deductions.

Claim the new, improved retirement plan start-up tax credit of … Read More

Getting Close to Retirement? Start Considering Your Medicare Benefit Choices Now

If you are approaching retirement age, currently age 65 according to the Federal government, you should know about your Medicare options and the many accompanying rules and exceptions.

Who Gets Medicare Part A and Part B Benefits

If are already getting Social Security benefits, you will automatically receive Medicare Part A and Part B benefits starting the first day you turn 65. (If you’re under 65 and have a disability, you will automatically get Part A and Part B after you receive benefits for 24 months.)

When you are automatically enrolled you will receive a red, white and blue Medicare card in the mail 3 months before your coverage begins.

If you are approaching age 65 and do not yet receive Social Security benefits, you will need to sign up for Medicare by contacting them three months before you turn 65.

What is Medicare Part A and Part B?

Part A … Read More

Planning your Rollover

If you are getting ready to retire or sell your business, it is possible that you have accumulated some savings in a company retirement plan. This does not sound like an issue, but withdrawals from such a plan can come with a significant tax bill. In order to avoid this issue, you should consider a rollover into an IRA.

The benefit to converting your savings into an IRA is that you will not have to withdraw the lump sum immediately, which postpones your taxes, and that your savings will continue to grow free of tax. As long as you make the rollover before the 60-day cutoff, you will set yourself up for a financially healthy retirement.

There are some other factors you must consider before making this decision, as taxes are sometimes unavoidable. For example, if you receive annuity payouts during retirement, these cannot be rolled-over free of tax. Additionally, a … Read More