With Tax Day behind us, many Americans are breathing a sigh of relief. But if you found yourself writing a large check to the IRS this year, it’s time to start thinking about how you can keep more of your hard-earned money in your pocket next year. At NestWorth, we specialize in helping small businesses and individuals leverage the changes in retirement planning law, especially those implemented through the recently passed Secure 2.0 act, to reduce their taxable income and build a more secure financial future.
For Small Business Owners:
If you’re a small business owner, the Secure 2.0 act offers several ways to reduce your tax bill while providing valuable benefits to your employees. One of the most significant changes is the increased tax credit for small businesses that establish a new retirement plan. Under the new law, you can claim a tax credit of up to 100% of the costs associated with setting up a new plan, up to $5,000 per year for three years. This means that you can offset the costs of establishing a retirement plan for your employees while reducing your taxable income.
Another key provision of the Secure 2.0 act is the dollar-for-dollar match the federal government provides for small business owners who contribute to their employees’ retirement plans. For each dollar you contribute, up to $1,000 per employee, the government will match your contribution. This means that you can provide a valuable benefit to your employees while also reducing your taxable income.
Other ways the Secure 2.0 act can help your business include:
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Increased catch-up contributions for employees aged 50 and older
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Allowing part-time employees to participate in retirement plans
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Simplified rules for multiple employer plans, making it easier for small businesses to band together and offer retirement plans to their employees
For Individuals:
Even if you’re not a small business owner, the Secure 2.0 act offers several ways to reduce your tax bill and secure your financial future. One of the most significant changes is the increased age for required minimum distributions (RMDs). Under the new law, the age for RMDs has been raised from 72 to 75, giving you more time to let your retirement savings grow tax-deferred.
Another key provision of the Secure 2.0 act is the ability to make catch-up contributions to your retirement accounts. If you’re aged 50 or older, you can contribute an additional $6,500 per year to your 401(k) or $1,000 per year to your IRA. This means that you can save more for retirement while reducing your taxable income.
At NestWorth, we understand that navigating the changes in retirement planning law can be overwhelming. That’s why we’re here to help. Our team of experts can work with you to create a customized retirement plan that takes advantage of the provisions of the Secure 2.0 act while helping you achieve your financial goals. Whether you’re a small business owner looking to provide valuable benefits to your employees or an individual looking to secure your financial future, we can help.
Don’t let another Tax Day go by without taking action to reduce your tax bill. Contact NestWorth today to learn more about how we can help you take advantage of the changes in retirement planning law and keep more of your hard-earned money in your pocket.
Written By Chris Youlton
