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How Business Owners and Professionals Can Maximize IRA Savings

How Business Owners and Professionals Can Maximize IRA Savings

Business owners have many responsibilities and cannot always predict what will happen. This is because not everything is planned ahead. It is important to make retirement planning a priority.

Retirement plans must be made in advance, no matter how well your business is doing. An Individual Retirement Account (IRA) is a good way to save for your retirement. Here are a few pointers:

  1. Open a traditional IRA.
    Depending upon your filing status and gross adjusted income, some of your IRA contributions may be tax-deductible. Your investments show growth in a tax-deferred account. As you start investing money for retirement, the withdrawn amount is ordinary income. As retirees are taxed less due to a lower tax bracket, the taxes go into your business directly.
  2. Open a Roth IRA.
    If you wish to enjoy the benefits later, but do not mind paying now, open a Roth IRA account with post-tax dollars to fund it. It has income eligibility limits and the allowable contributions are dependent on the filing stats. The Roth IRA benefit is at the time of retirement.
  3. Start early.
    Employers often offer a matching gift program, where they match any contribution the employee makes to his or her IRA causing the growth of the IRA to compound. When you start investing early, you will see your investments grow over time. On average, the annual return will be different even with an allowable contribution offering an 8 percent annual return rate. Use the IRA calculator to see the changing variables and the money that will accumulate.
  4. Contribute Anytime Up to the Tax Filing Deadline
    Under the current IRS rules, you can contribute to your IRA up to the tax filing deadline for the current year. You can contribute anytime in the first quarter of the year. It is always best to wait until closing day, but generally it is a wise strategy to make regular, small contributions throughout the year.
  5. Try using an SEP-IRA for employees.
    You can retain exceptional employees by providing them with great benefits and competitive salaries. There are Simplified Employee Pensions (SEP) that start low. This is a retirement plan for small business owners allowing coverage for both the employees and the owner. Contributions of 25 percent or more of the employee’s pay are tax deductible. And your business is safe from taxes on any earnings from the plan’s investments. You can be flexible when determining what to contribute. If you are in a tight spot financially, it is wise not to contribute at all.

Why Choose Geraldine A. Clahar, CPA Firm

Geraldine A. Clahar, CPA, has over 30 years’ experience as a professional accountant. Her background includes work in both public accounting, (with three years at KPMG’s New York office), and private accounting in the healthcare industry. She holds a BBA in accounting from CUNY Baruch College and an MBA in Taxation from St. Johns University. Her firm, G.A. Clahar, CPA serves small- to-medium-sized businesses as well as individuals, servicing all of their accounting, bookkeeping, tax, and financial planning needs.

Our Overall Services Include:

  • Accounting
  • Assistance with bank loan applications
  • Bookkeeping
  • Business consulting, budgeting and forecasting
  • Financial statement compilations, review, and analysis
  • Notary public
  • Payroll
  • Tax
  • Tax filings
  • Assistance with obtaining federal and state Minority and Small Business Certification

About Our Firm

Our experience in both public and private accounting provides us with a set of skills usually found only in large accounting firms. But our small size means that we offer a high level of attention and personalized service to each client.

In the field of taxation, rules are updated or become obsolete very quickly. We are constantly refreshing our knowledge base to stay on the cutting edge in the accounting and tax fields.

For professional, attentive service, no matter the size or scope of your organization, whether it is for-profit, not-for-profit or for individuals, contact us today for an appointment.

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