Choosing The Right Retirement Plans For Your Employees

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Choosing The Right Retirement Plans For Your
Employees
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• Choosing the right retirement plan for your
  employees can be tricky, and of course whatever
  plan you select needs to work for your entire
  business. Here are some factors that you might
  want to consider before choosing retirement
  coverage
• How many employees do you have?
• If your small business is being run by you and
  your partner or spouse, then to get the highest
  possible contribution limits you should think
  about a Self-Employed 401(k). That may depend on
  whether you intend to take on more employees as
  your business grows however, in which case you
  might have to choose between a SEP IRA and a
  SIMPLE IRA, which can both give coverage to
  employees.

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• You will then need to decide whether you want to
  fund your employees' accounts yourself by means
  of a SEP or whether your employees should
  contribute by means of a SIMPLE.
• Who pays into the plan and how much?
• Once youve selected a retirement plan, youll
  need to consider the contribution limits and
  decide upon whose responsibility it will be to
  make the contributions. In recognizing that self-
  employed individuals can be both an employee and
  employer, a Self-Employed 401(k) offers the
  largest possible contribution, and as an employee
  you can make elective deferrals of up to 19,000
  for the current year.

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• As an employer, you are permitted to make a
  profit-sharing contribution of up to 25 of
  compensation and up to 56,000 for the current
  year.
• If you or your employees are 50 or older, this
  type of coverage allows for catch-up
  contributions of up to 6,000 and enables them to
  be eligible for added tax breaks.
• If your business is not incorporated means that
  you are usually permitted to deduct contributions
  for yourself from your personal income, while if
  it is incorporated, the contributions can be
  deducted as a business expense.

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• For businesses with an income that varies, a SEP
  IRA might give you more flexibility, but you may
  have to contribute the same percentage for your
  employees as you do for yourself. If youre an
  employer, then youre permitted to contribute up
  to 25 of compensation and up to a maximum of
  56,000 for the current year, but you dont have
  to contribute every year. If, on the other hand,
  you want your employees to help fund their
  retirement account, then you might want to think
  about a SIMPLE IRA, which is available to
  businesses who employ up to 100 people. Salary
  deferral contributions can be made by employees
  with this plan, of up to 100 of compensation,
  but must not exceed 13,000 for the current year.
  As the employer, you must also contribute to
  their retirement accounts by either matching
  their contributions dollar for dollar up to 3 of
  compensation or contribute 2 of their eligible
  compensation.

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• How costly are these plans?
• The Self-Employed 401(k), SEP IRA and SIMPLE IRA
  are all plans that are relatively uncostly and
  relatively painless to set up. SEP IRAs and
  SIMPLE IRAs do not require annual plan filings
  with the IRS, instead of needing just certain
  employee notifications. The Self-Employed 401(k)
  does take a little more input, however, requiring
  an annual Form 5500 filing once plan assets go
  over 250,000. To discuss which retirement plan
  would best suit you and your small business,
  reach out to a reputable payroll company who can
  talk through your options in greater detail
  before you make any decisions.

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• Apollo Payroll is one of the premier small
  business payroll companies in Miami Beach and
  Coral Gables. Apollo Payroll is dedicated to
  delivering expert advice, responsive service, and
  highly accurate payroll processing and reporting
  to ensure the success and growth of the business
  that we serve. Our services include comprehensive
  payroll service in Miami and other cities in
  Miami-Dade County, employee background check and
  group health insurance in Coral Gables Miami.