Retirement Plan Setup and Management with Z Tax & Accounting:

At Z Tax & Accounting, we help businesses set up and manage retirement plans properly to maximize tax deductions while ensuring compliance with federal regulations. Correctly administered retirement plans allow both the business and its employees to enjoy tax-deferred growth on contributions and earnings until distributions are made. Contact us today !

Tax Benefits by Business Type:

Sole Proprietorships and Partnerships:

• Owners can deduct contributions to their own retirement accounts as an adjustment to income on Schedule 1 (Form 1040), but only if they have self-employment income.
  
  

• Contributions made on behalf of employees are fully deductible for the business, even if it reports a net operating loss.
  
  

• Self-employment income includes net profits from Schedule C or F or a partnership, less 50% of the self-employment tax.
  
  

S-Corporations:

• Because S-Corporations are pass-through entities, shareholder-employees report their retirement plan deductions on their individual tax returns.
  
  

• Contributions can only be made from earned compensation (such as wages).
  
  

• Distributions to shareholders do not count as earned income for retirement plan purposes.
  
  

C-Corporations:

• C-Corporations are not pass-through entities, so contributions for employees, officers, or shareholder-employees can be deducted directly on Form 1120, U.S. Corporation Income Tax Return.
  
  

• Deductions apply even if the corporation has a net operating loss for the year.
  
  

Compliance and Nondiscrimination Rules:

Retirement plans must follow nondiscrimination requirements to ensure they do not favor owners or highly compensated employees over other staff.

• Qualified retirement plans are subject to ERISA nondiscrimination rules, which ensure all eligible employees receive fair benefits.
  
  

• Certain plans must pass annual nondiscrimination testing to verify that highly compensated employees (HCEs) and key employees do not receive disproportionate advantages.
  
  

How Z Tax & Accounting Can Help:

Our team at Z Tax & Accounting provides end-to-end support for retirement plans, including:

• Plan setup and administration for all business types (sole proprietorships, partnerships, S-Corps, and C-Corps)
  
  

• Ensuring proper contribution deductions for both owners and employees
  
  

• Guidance on self-employment income calculations and shareholder compensation rules
  
  

• Compliance with ERISA and nondiscrimination testing requirements
  
  

• Maximizing tax benefits while protecting your business from IRS issues
  
  

With our expertise, your business can offer competitive retirement benefits while taking full advantage of available tax deductions. Contact us today !

Common Type of pension plans are as under: 

Simplified Employee Pension (SEP-IRA) Plans          SIMPLE IRA Plans          SIMPLE 401(k) Plans          Defined Contribution Plans          Defined Benefit Plans