Keep More of Your Hard Earned Money!

Sure being a small and/or independent service provider has it's share of challenges (actually, more than its fair share), but there are benefits. One of my favorite ones is known as the Individual 401k that's available to certain types of business owners. I'm sure many of you are familiar with the regular "corporate" 401k plan that enables you to defer taxes on up to ~$15,000 of your income. Compared to the Individual K, that's child's play.

One of the main reasons corporate K's are capped is due to anti-discrimination testing that needs to occur. Basically that prevents super-rich folks from exploiting the plan while lower salaried workers end up contributing less. It levels the playing field and keeps things fair.

The Individual K, by contrast, is usually not subject to anti-discrimination testing due to the typically small base of employees many of us have. Because of that, the limits for the individual K can be upwards of $45,000 of income you can shield and defer taxes on. Obviously that's a tremendous benefit in terms of tax savings.

This isn't financial advice. It's advice to go talk to your financial advisor and ask about Individual 401k's and see if you're eligible and how beneficial it could be for you. Get educated. Save money.

- Mike Figliuolo at thoughtLEADERS, LLC