Now Your Clients Can Afford to Adopt a 401(k) Retirement Plan

Are your clients under the impression that adopting a retirement plan is too expensive? We’re making it easy to prove them wrong. The SECURE Act allows eligible employers to receive valuable tax credits simply for establishing a retirement plan.

Key Takeaways:

• Potential tax credits can help your clients offset the costs of establishing and administering a retirement plan.
• You can show your clients their potential tax savings with our SECURE Act Estimator.
• With the SECURE Act Estimator, reduce the time it takes to calculate your client’s potential savings.

What tax credits are available for business owners?

Whether your clients establish a 401(k) retirement plan, contribute to a plan, or add an auto-enrollment feature to their plan, there’s a potential tax credit for that! Let’s take a closer look at each one of these options.

• Startup credit – Eligible small employers who establish a 401(k) plan can receive up to $5,000 in tax credits for the first three years. Employers with 50 or fewer employees are eligible to claim a tax credit of up to 100% of the administrative costs of starting their 401(k) plan. Employers with 51-99 employees may claim a credit of up to 50% of these costs. 
• Employer contribution credit – Small employers that provide a match or profit sharing contribution may be eligible for a tax credit for contributions of up to $1,000 per employee.  This credit is fully available to eligible employers with 50 or fewer employees and is reduced for employers with 51-99 employees. This credit is available on a decreasing basis for a period of 5 years.
• Auto-enrollment credit – If an employer adds an auto-enrollment feature to their plan, they can receive a tax credit of $500 for the first three years the feature is available.

How does the SECURE Act 2.0 Tax Credit Estimator work?

Let’s say your client, Joe Smith, the owner of Beard & Mustache Barber Shop, is interested in a retirement plan for his employees but he doesn’t think he can afford it. You can set up an appointment with him to show him how adopting a 401(k) retirement plan could decrease his taxable income—therefore saving money that Joe can put back into his business.

The process would be as simple as opening your laptop, navigating to the SECURE Act Tax Credit Estimator, and asking Joe a series of questions related to his business. Once he’s provided you with the necessary information, you’ll enter it into the Estimator, click calculate, then presto! You and Joe can see just how much his potential tax credit can be.

How will the SECURE ACT 2.0 Estimator improve your business?

Let’s go back to your client, Joe. He may be so enthused about his potential tax savings that he’ll feel confident in establishing a retirement plan that you recommend. Joe will walk away knowing that not only is he saving money, but he’ll also be helping his barbershop employees save for retirement in the process. Research shows that employees who are offered benefits are more likely to stick around with their employer, saving Joe the time and energy that scouting for talented barbers requires.

As an experienced advisor, the estimator can help streamline the work required to estimate tax savings for your clients. You may be able to provide more estimates in less time than ever, helping you pursue more leads daily.

Conclusion:

Don’t allow your clients to shortchange themselves by not adopting an advantageous ePlan Services 401(k) retirement plan.