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The Business of Savings
A Very Special Kind of 401(k) Plan: Save More with Less Hassle
Imagine if there was a 401(k) alternative for small businesses that:
- Made saving the maximum without any restrictions easy
- Offered strong tax incentives
- Reduced IRS administrative hassles
Good news, there is and our deadline for this kind of plan for this calendar year is September 21st!
It’s called a Safe Harbor 401(k) plan. Safe Harbor plans allow business owners to contribute the maximum deferral amount ($16,500 in 2009) to their own account and automatically satisfy the IRS non-discrimination testing associated with other 401(k) plans. By providing a small “safe harbor” match, any employee including the owner can give the maximum to the plan. This match is what helps the business avoid the hassles of government discrimination testing. And the match will be tax deductible for your business.
To get more details about Safe Harbor, just download our guide.