[Hidden-tech] Employee Profit Sharing

[Jan Werner]

You can contribute 100% of compensation to a Qualified Profit Sharing 
plan, as opposed to 25% for an SEP, but the IRS still caps the maximum 
deduction you can take at 25% of total compensation, so that will not 
get you off the hook. The unpleasant details are explained in IRS 
publication 560 which you can download from www.irs.gov.

There are many good reasons why you might want to change your pension 
plan, but  I am not an expert, and I would strongly suggest that you 
talk to one BEFORE you do anything. It may not help you much for last 
year, but it may pay off big time in the future.

Jan Werner
________________

Andy Klapper wrote:
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> 
> Last year was a good year.  (Hurray me!)  Unfortunately I only paid
> quarterly estimated taxes based on the year before that.  Now that I've
> finally plugged all the numbers into TurboTax it looks like Uncle SAM is
> going to want a large chunk of change.  I have heard that if I create an
> employee profit sharing plan I can instead plow more money into my
> retirement plan pre-tax and reduce my tax bill at the expense of having less
> liquid assets.  This, to me, seems like a good thing.  (I'm an LLC in MA
> with only one member and no employees.  I already have a SEP plan that I
> have maxed out for 2005).
> Has anybody else out there done this before, and if so what is involved?
> (I'm hoping that it is no more than a form and a fee, but I wouldn't be
> shocked if it required more than that - if so can anybody recommend somebody
> with experience that can do this quickly, and therefore, both well and
> inexpensively).
> Any other words of tax savings advice would also be timely and appreciated.
> Thanks!
> Andy Klapper
> Asgard Technology Group, LLC
> 
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