Self Employed Tax Deductions: Tax Deductions are a much chased around topic all year round, and why should it not be! As a self employed individual you work hard taking all the business risk only to realize that a large share of your income will have be given away to the government in the form of taxes. Of course, there are several small tax deductions that you can take on your business returns and bring down the amount of taxable income. However, this list of tax deductions is long and each individual item is worth only a few hundred dollars. This is where retirement plans come in which can allow you to deduct several thousand dollars off your income, and are one of the most favored self employed tax deductions.
Unfortunately, the intelligentsia tend to concentrate around a 401(k) plan, SEP IRA or a profit sharing plan and a defined benefit plan finds no mention. However, a defined benefit plan is capable of generating a tax deduction of up to $200,000 and higher in some scenarios, making it an ideal choice for a self employed individual looking for a large tax deduction. One of the reasons why defined benefit plans find no mention is the complexity of the plan and that it requires the certification of an enrolled actuary. This is where we come in,to mask the complexity for you, provide services for drafting the plan document, actuary certification, and annual administration including IRS filings.
In the article on our website, we will demonstrate how a defined benefit plan is simple, capable of providing a large tax deduction and how you can get one for yourself. Use our Defined Benefit Calculator to estimate how much you can accumulate in a Defined Benefit Plan and generate tax deductions each year.