Profit Sharing Plan
As an employer, you may make a profit sharing contribution of up to 25% of your compensation, with a maximum contribution of $49,000 ($54,500 if age 50 or older). A profit-sharing plan is a qualified retirement plan that allows you to contribute for yourself and any eligible employees.
A Profit Sharing Plan is similar to a SEP-IRA, but you have the ability to control vesting periods and employee participation. With a profit-sharing plan, a separate account is established for each plan participant, and contributions are allocated to each participant based on the plan's formula (this formula can be amended from time to time) which may help reward those most responsible for the company's success. A Form 5500 is required to be filed for most Profit Sharing plans annually. Contact Scott Brookes, AIF®, for more information.
Back to Business Retirement and Planning