401k Saves Money for Small Businesses

People tell me that not all small businesses have 401k plans for employees. Can I avoid having one too and save money on matching contributions?- Clare Eickhoff, Owner of Boutique, Fremont, Idaho

Your business is not compelled to have a 401K plan for the employees. But, it makes good business sense for you, the business owner, to set one up. A 401k plan is not, contrary to popular belief, a plan that benefits just your employee.  It is a great tax saving tool for the business owner as well. Here is why the tax break alone makes it worthwhile for you to start thinking about a 401k today.

Most small businesses are eligible for federal tax credits. This means that if your business qualifies for this credit, you could get up to $500 tax credit in a year for a period of three years during the initial part of the plan.  This is quite an attractive tax break for a small business. Also, your contributions to your employee’s plans are tax deductible.

In addition to the savings you get, you also improve employee morale by offering a savings plan for their future. The 401k plan shows that you care about the welfare of your employees. By making matching contributions to the employee’s 401k, you can build loyalty among your staff.

If you are hesitant to open a 401k because you do not want to spend hours managing or even setting up the account, then there is a simple solution for you. Simply opt for a ready to use software suite like http://401k-easy-online.com. With this suite, you can have your 401k plan set up and running in an unbelievably short time. Managing the plan, keeping track of contributions and withdrawals and updating records is just as simple and quick and requires just minutes of your time every month.

About Elliot Earl, Director, Pension Trade Association
Director, Pension Trade Association Founded in 1982, the Pension Trade Association [California Domestic Nonprofit Corporation #C1629080] is dedicated to helping workers save for their retirement through expanded coverage of 401k -type defined contribution pension plans.

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