If you participate in a qualified 401k plan, you’re among millions of Americans utilizing this option for retirement planning. These plans are a great way to stock away pre-tax dollars to fund your future lifestyle once you retire. A properly planned 401k can also represent an excellent benefit for a business owner as well. Here’s how. The Scenario We recently met with small business clients, along with their CPA. This particular client generates around two-and-a-half million dollars in gross revenue a year. The owners, a husband and wife team, each earn $75,000 a year in W-2 wages, and the business saw a profit of just over $297,000, which is split 50/50 between them. They’re frugal with their money, carrying no debt and spending roughly $6,000 a month on living expenses. This has been the key to their success. The Before and After They’re making almost $450,000 a year in taxable income. Before they incorporated 401k planning into their business model, it wasn’t unusual for them to get tax bills ranging from $150,000 to $180,000 a year. Now, with their 401k plan in place, their combined tax bill was $63,000. We placed $106,000 of their income into the plan. Utilizing employee […]