There are a lot of tax planning opportunities to take advantage of before December 31^st.  But there is one that you need to implement in the next couple of weeks and it could save you a lot in taxes.

It’s setting up a safe-harbor 401(k) plan for 2018.

Many times, small business owners think 401(k)’s are only for bigger businesses, but they’re not.  They can be an incredible tool (along with Solo 401(k)’s for one-person businesses) to reduce your taxable income, save for retirement, and provide significant benefits.

Here are a few things they can provide:

• Business owners can make the maximum 401(k) contribution for 2018 ($18,500 or $24,500 if over age 50).
• Safe harbor contributions for employees can be either a flat 3% for eligible employees, or a matching contribution of up to 4%.
• The plan may allow for additional profit sharing or matching contributions that can benefit business owners at little to no additional employee cost.
• These plans can be paired with cash balance/defined benefit plans for even larger tax-deductible contributions, if desired.

But here’s the rub…these HAVE to be established by October 1, 2018 to be effective for 2018.  If they are set-up after this date, they don’t apply until 2019.

And, as I wrote about previously, if you are a service provider looking to take advantage of the new 20% pass-through deduction, deductible contributions to a 401(k) could be the difference between taking the 20% deduction and not.

So, check out this incredible tax saving opportunity today…it may be worth a whole lot more in tax savings than you thought.