How Adding a 401(k) Can Improve Your Business

How adding a 401(k) can improve your business

A 401(k) plan has a lot of benefits for businesses. It is important to employees but it can also help you to retain and attract new talent. We discuss why adding a 401(k) plan is the right move for your business.

Benefits of Adding a 401(k) Retirement Plan To Your Business

Retirement benefits can help to improve your business outlook. Here are some ways it achieves this goal:

  • It helps your business to recruit the best talent

It can be tough to find the right candidates for your business. When candidates and potential staff are considering your business, they don’t just look at the salary on offer, but they also consider retirement benefits to be important to them. Adding a 401(k) plan can help your business hire and retain the best staff to help your company grow.

  • Lower tax for employees and employers

When business owners and employees contribute their salary to a 401(k) plan, their income is reduced, which puts them in a lower tax bracket. The result is they both pay a lower tax liability at the end of the financial year. 

  • Lower tax deductions for businesses

A 401(k) plan contribution by an employer may qualify as a business expense, which automatically makes them tax-deductible. Small businesses can especially benefit from 401(k) accounts as any matching or profit-sharing contributions are tax-deductible, giving them a much-needed saving on business tax.

How to add a 401(k) plan to improve your business?

Business tax can be a significantly large portion of a business’s expense. Small businesses and start-ups can benefit the most from taking advantage of a 401(k) plan for tax deductions. Larger benefits can increase productivity and employee loyalty to their business by providing them with retirement benefits. 

To add a 401(k) plan, you need to hire a financial accountant or bookkeeper who will help you with payroll services and retirement benefits. An accountant can help you with tax preparation and deductions that come from the 401(k) plan.

If you’re looking for a professional accountant to assist you with your 401(k) plan tax deductions, give us a call today!

Are Any Part of My Home Payments Tax Deductible?

Homeowners know all too well how enormous repayments can be, never mind how much it costs to keep a home well-maintained and in good condition. Hence the reason why so many Americans are keen to find out if any part of their home payments are tax deductible. The great news is that there are multiple tax benefits that come with owning a home. We provide details on each of them below.

Property taxes

In most cases, property taxes are tax deductible. According to new law, the maximum amount of state and local property, income, and sales taxes that can be deducted at any one time is $10,000.

Mortgage interest deduction

All homeowners know just how much interest they wind up paying over the course of their mortgage. Luckily, this interest is also usually deductible. You will be able to determine how much mortgage interest you paid in box 1 when you receive your Form 1098.

Points paid when buying your home

This one applies to home owners who have only recently purchased their home and who paid points in order to land a better interest rate. Check box 6 in Form 1098 to find out how much you paid for points, which are tax deductible.

Private mortgage insurance premiums

If you opted for a traditional mortgage and you put down a deposit that was less than 20% of the value of the home, you likely paid private mortgage insurance premiums. The amount paid can be found in box 5 of Form 1098 and, once again, is usually tax deductible.

Home office deduction

Are you lucky enough to own your own business and work from home? Then you will be eligible to claim the home office deduction. You can choose to claim up to $1,500 which is the set dollar amount of $5 per square foot of your home used for your business up to 300 square feet. Alternatively, you may also claim based on a portion of your home expenses.

For more information, contact the Certified Public Accountants at Georgen Scarborough Associates.