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Financial Planning

Small Business Retirement Plans

Small businesses are the backbone of the American economy. The amount of responsibility that you face as a small business owner can make creating a work/life balance difficult. Researching and deciding on a suitable retirement plan for you and your business is likely to fall by the wayside. But failing to plan can lead to a less than ideal retirement. You deserve a plan that provides both security and tax relief.

PG&S accountants and advisors understands that your business may be small, but your retirement dreams are anything but small. We are prepared to help you find affordable retirement solutions that benefit you, your spouse and your employees, allowing you to keep your focus where it should be—on running a successful business.

Together we will implement tax-deductible contribution retirement strategies that offer security and harvest tax-deferred growth that boosts your bottom line. Instead of focusing solely on quick-win strategies that score you short-term tax savings, or leaving your golden years to chance, you can begin taking advantage of a long-term plan that offers you peace of mind when you retire, generates tax savings over the long haul and helps you recruit and retain top-notch employees right now.

If you already have a strategy in place, we can do a cost/benefit analysis to ensure it is the best fit for you and your business. Having a full scope of your financial picture makes us more than equipped to address your business’ retirement needs holistically. Plus, we are backed by HD Vest Retirement Specialists who provide technical support and specialized training to ensure you are paired with the best solutions possible.

Contact us for a complementary cost/benefit analysis of your business retirement plan.

PG&S Accountants and Advisors
{We’ve Got This}

Retirement Plan Considerations

Qualified plans are employer-sponsored retirement plans such as 401(k)s and small business plans. Although there are contribution limits and strict distribution rules, these plans are popular because of their tax benefits. Generally, employers will make participation even more attractive by matching all or a portion of an employee’s contribution. It’s important that you choose the optimum plan to benefit the key people in your company.

Simple IRAs

A Savings Incentive Match Plan for Employees Individual Retirement Account (SIMPLE IRA) is a retirement savings plan designed for small businesses with up to 100 employees. This cost effective plan type has similar features as a 401(k) plan, without the expensive administrative cost, testing and governmental reporting requirements. It offers a mandatory employer contribution feature and has lower contribution limits when compared to a 401(k) plan.

Designed for governmental, tax exempt and for profit entities with 100 or fewer eligible employees.

Employee coverage requirements:
• Must include employees age 21 and up to two years of service.
• Have earned income of at least $5,000 per year, and they must expect to earn $5,000 during the current year.
• Worked three out of the proceeding five years.
• Employer may set less restrictive requirements
• Immediate 100% vesting in contributions.

Employers are required to make an annual contribution and may choose from one of two contribution formulas:
• A dollar-for-dollar matching contribution, up to 3% of each employee’s compensation to a maximum of $12,500, or $15,500 for participants who are age 50 and above. This contribution may be reduced to a level below 3%—but not below 1%—in two out of every five years.
• A non-elective contribution equal to 2% of pay for all eligible compensation up to $265,000 — resulting in a maximum contribution of $5,300 for each eligible employee.
• Employers may switch formulas in a new calendar year as long as employees are notified at least 60 days prior to January 1.


Simplified Employee Pension Plans (SEP IRAs) are a low cost retirement plan solution designed for self-employed individuals and small business owners. Similar to Profit Sharing Plans, SEP IRAs are funded solely by the employer and provide the flexibility of discretionary contributions. They offer higher contribution limits associated with larger retirement plans but with minimal plan administration.

In addition, in SEP IRAs, employers may be able to integrate their plan with Social Security which can result in higher proportionate contributions for employees earning above the social security wage base.

Designed for corporations, partnerships, sole proprietorships or self-employed individuals with earned income.

Employee coverage requirements:
• Must include employees age 21 and older with two or more years of service and earned income of at least $600 annually.
• Worked three out of the proceeding five years.
• Employer may set less restrictive requirements.
• May exclude: ◦Union employees / Nonresident aliens with no U.S. income.
• Immediate 100% vesting in contributions.

A Single K Plan is a retirement savings alternative for owner-only employers. It offers business owners more flexible plan design features and greater savings potential than other small business retirement plans such as SEPs and SIMPLE IRAs. This easy to establish plan offers the benefits similar to a Safe Harbor 401(k) typically enjoyed by larger employers and requires minimal administration at a low cost, to meet the needs of the owner-only employer

Designed for corporations, partnerships, sole proprietorships and nonprofit entities that employ:
• Owners and spouses, owner’s parents, children and grandchildren, and
• Owners with excludable part-time or seasonal employees.

Employee coverage requirements
• Must include employees age 21 or older with two or more years of service.
• May exclude employees with less than 1,000 hours of service annually.
• Employer may set less restrictive requirements.
• Immediate 100% vesting in contributions

Funding the Single K Plan and contribution limits for 2015:
• Overall contribution maximums may not exceed the lesser of $53,000 or 100% of eligible compensation up to $265,000.
• The maximum tax-deductible profit-sharing contribution is the lesser of 25% of eligible compensation or 20% for self-employment income.
• Contributions are not eligible to be deposited on Roth (after-tax) basis.

Participant salary deferrals
• The maximum allowable deferral is the lesser of: ◦100% of employee’s compensation or $18,000.
• Individuals age 50 and above may contribute an additional $6,000 in catch-up contributions, for a maximum of $24,000.
• Catch-up contributions do not apply to overall contribution limit.
• Deferrals may be made as Traditional (pretax) and/or Roth (after-tax) 401(k) contributions.

Quick Links

- IRS Forms
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- Social Security Forms
- Where Is My Federal Refund
- Where Is My NJ Tax Refund
- Financial Documents Timeline
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Contact Us

9700 Pacific Ave, Suite 102,
Wildwood Crest, NJ
Phone: (609) 729-0215

21031 Catawba Ave, Suite 104
Cornelius, NC
Phone: (704) 765-5188

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