Do you want to save for retirement and receive extra tax credits? Small business owners have until December 31, 2022 to take advantage of the tax credits setting up a Simple IRA offers.
Simple IRAs are a type of retirement account that small business owners with employees can set up. Employers can choose between contributing at a fixed 2% rate to their employees’ accounts or match dollar for dollar up to 3%. Employees can contribute a maximum of $13,500 in 2021.
Under the Setting Every Community Up for Retirement Enhancement (“SECURE”) Act of 2019, a credit for smaller employers of $250 per non-highly compensated employee with a maximum of $5000 is available until December 31, 2022. If the retirement plan includes automatic enrollment, an additional credit of up to $500 is also available.
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Tax Tips discussed here were prepared for the purpose of this video. To apply these strategies, please consult with your CPA or professional tax preparer.