Alexandria, Va. — The newly released IRS 2009 contribution limits for qualified retirement plans means that individuals and their employers can contribute more than ever before to a 401(k) plan, announced Lamaute Capital (member FINRA, SIPC). In addition to the opportunity to shelter from taxes a big portion of income, many 401(k) plans have a loan feature that can give its owners access to cash in times of need.
A 401(k) provides a great tax break to employees who contribute to the plan, and no business is too small to have a 401(k). Even a small business with no employees or employing a spouse only can establish a One Person 401(k) plan, according to Lamaute Capital. This includes independent contractors with 1099 income, freelancers, sole proprietors, partnerships, Limited Liability Companies (LLC) or corporations.
Key benefits of a 401(k) plan:
* High maximum contribution limit.
* Contributions are tax deductible and are based on compensation or earned income. Roth contributions are from after-tax income.
* Funds in a 401(k) grow tax-deferred.
* Assets can be rolled over from other qualified plans or IRA’s into a 401(k).
* One can take a loan from a 401(k) (if allowed by the plan) – up to the lesser of 50% or $50,000 of account balance.
A One Person 401(k) also known as Solo 401(k) must be set up no later than December 31, to be eligible for tax deductions for that tax year. One can go to Lamaute Capital’s website http://www.InvestSafe.com to request a free Solo 401(k) application kit.
401(k) Contribution Limits for 2008 and 2009
Tax Year 2008 2009 Salary Elective Deferral Limit $15,500 $16,500 Maximum Employer + Employee Defined Contribution Plan Limit $46,000 $49,000 Catch-Up Contribution Limit For Age 50+ $5,000 $5,500
(Source: www.irs.gov/retirement/article/0,,id=96461,00.html)
Lamaute Capital is a member of FINRA, SIPC.
“U.S. Treasury Circular 230 Notice: Any U.S. federal tax advice included in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding U.S. federal tax penalties.”
