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The easiest move is for the corporation to adopt a Profit Sharing Plan (any discount broker has prototype plans for which they charge $25 to $50 per year). The plan is really two plans in one: a money purchase component and a profit sharing component. The money purchase component is mandatory and is usually set at 10%. The profit sharing component is discretionary and is usually set at 15%; totalling 25% of pay to the president/owner. Max for the sum of the two components is $30,000 per year. If you need or want to go past that; the corp can adopt a defined benefit plan; which depending on salary (above $120,000) and age of participant; can create annual contributions in the range of $10,000 to $100,000 more. However, you are likely to see much higher fees for a DB plan as it requires the annual review & certification of an enrolled actuary.

TheBadger


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