401(k)s

With the tax-filing deadline behind us, many people are suffering tax-related sticker shock.  What would it take to have a better tax-season next year?  Here is a quick checklist of ideas; not all will apply, and of course there are caveats and limitations to almost every one of them.  We’ll get detailed and down in the weeds when strategizing with your personal situation i

If you do a quick Google search to find out how much you can contribute to your 401k, you’ll usually find that the most you can defer from your salary is $19,500*. In reality, the maximum that can go into a 401k is $57,000*.

*If you’re over 50, add $6,500 to both of these numbers.

In our perfect world, you’d never need to borrow from your 401(k) OR cash out your IRA. We don’t intend to recommend either of these strategies by writing about them, however, sometimes people run into a cash crunch and after exhausting other options turn to their retirement savings for help. 

If you’re a practice owner with a 401k, Cash Value, or Profit Sharing Plan, now is the time to look at your employer contributions to the plan.  Defined benefit, discretionary matches, and profit sharing contributions are based on last year’s compensation numbers. 

As a Dental Practice Owner, you have a huge advantage over a typical employee in your ability to fund a retirement plan, and the tax benefits are significant.  "Uncle Sam" is helping you fund your retirement in the form of tax deductions.  

We love it when clients maximize investments in your tax-advantaged plans.  For 2020, some maximum contribution limits changed and others did not.  Here’s a quick listing of maximum contributions for various types of retirement plans:  

No change for 2020:

Sometimes dentists care so much for their patients and sacrifice so much for their employees that they short themselves and their own families.

COVID-19 UPDATE:  As of 3/28/2020, RMDs can be suspended for 2020 for those who prefer to leave that money invested.  

Updated for the new SECURE Act:  For any individual born after June 30, 1949, the required beginning date for Required Minimum Distributions (RMDs) is April 1 of the year after the year in which such individual reaches age 72 (or, in the case of certain plans, if he or she is still working, after the year in which he or she retires if later).

Updated for the new SECURE Act:  For any individual born after June 30, 1949, the required beginning date for Required Minimum Distributions (RMDs) is April 1 of the year after the year in which such individual reaches age 72 (or, in the case of certain plans, if he or she is still working, after the year in which he or she retires if later).