SUBSCRIBE
Enter your Name and Email address to get
the newsletter delivered to your inbox.
Please include name of person that directed you to my online newsletter so I can thank them personally.
Robert A. Imparato, Jr CFP®
CERTIFIED FINANCIAL PLANNER™ professional
Craig A. Hyldahl CFP®
CERTIFIED FINANCIAL PLANNER™ professional
R.I.C.H. Planning Group, LLC
105 Fieldcrest Avenue, Suite #507
Edison, NJ 08837
Robert: 732-326-5240
Craig: 732-326-5240
Fax: 732-326-5331
Robert: robert@richplanninggroup.com
Craig: craig@richplanninggroup.com
Website: www.richplanninggroup.com
November/December 2017
Let's talk business Q&A
Q. My spouse and I run our own business. We do not have any retirement savings. Would setting up a solo 401(k) plan make sense?
A. A solo — or one-participant — 401(k) plan may be a suitable choice for anyone who is self-employed or owns a small business with no employees (other than a spouse) and wants to establish a retirement plan offering potential tax advantages. A solo 401(k) plan allows you to defer up to $18,000* of compensation (or “earned income” if you are self-employed), plus an additional $6,000* if you are age 50 or older. On top of that, your business can make a tax-deductible profit sharing contribution to the plan of up to 25% of your annual compensation (25% of “earned income” if you are self-employed). Total annual
contributions to an individual 401(k) plan account, not counting catch-up contributions, cannot exceed $54,000 (Internal Revenue Code Section 415(c)(1)(A); Notice 2016-62, 10/27/2016).*
Q. I’m thinking of having my company take out a key person life insurance policy on our top software designer. Besides getting her consent, is there anything else we should do?
A. When a successful small business relies heavily on a key individual, the death of that person could be devastating. Key person life insurance is one way to help mitigate the financial fallout. The business pays the policy premiums and is also the beneficiary of the policy. The life insurance payout helps ensure that the business would be able to operate until a replacement for the key person is found. The proceeds of the policy can be used to cover essential business expenses, such as salaries, overhead and loan payments while the business recovers from the loss of the key person. To preserve tax-free treatment of the policy proceeds, you need to take certain steps. In addition to following specific notice and consent procedures, you will need to meet certain other requirements, including filing IRS Form 8925, Report of Employer-Owned Life Insurance Contracts, with your company’s annual income tax return (Internal Revenue Code Section 6039 I; Treasury Regulation Section 1.6039I-1).
* These 2017 dollar limits may be inflation-adjusted for future years.
CONTACT US
Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.
Securities offered through Equitable Advisors, LLC (NY,NY (212) 314-4600), member FINRA,SIPC (Equitable Financial Advisors in MI & TN). Investment advisory products and services offered through Equitable Advisors, LLC, an SEC-registered investment advisor. Annuity and insurance products offered through Equitable Network, LLC, which conducts business in California as Equitable Network Insurance Agency of California, LLC; in Utah as Equitable Network Insurance Agency of Utah, LLC; and in PR as Equitable Network of Puerto Rico, Inc. Equitable Advisors and Equitable Network are affiliated companies and do not provide tax or legal advice.
R.I.C.H. Planning Group, LLC is not owned or operated by Equitable Advisors or Equitable Network. Equitable Advisors and Equitable Network are brand names for Equitable Advisors, LLC and Equitable Network, LLC, respectively.
GE-4833845.1 (7/22)(Exp. 7/24)
CFP® and CERTIFIED FINANCIAL PLANNER™ are certification marks owned by the Certified Financial Planner Board of Standards, Inc.
These marks are awarded to individuals who successfully complete the CFP Board's initial and ongoing certification requirements.
R.I.C.H. Planning Group, LLC and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.
The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.