The American Taxpayer Relief Act of 2012 may have alleviated some taxpayers’ estate tax concerns, but it has increased the need for income tax planning for many, especially business owners. A defined benefit plan is an opportunity that may allow profitable business owners to significantly decrease their taxes.
A defined benefit plan is designed to pay a specified level of annual benefits from the account after the client reaches retirement age. The closer you are to retirement age, the more you can contribute to the account. Profitable business owners who are close to retirement age may be able to significantly reduce their taxes.
Certain types of business owners are strong candidates for a defined business plan, and will benefit the most. Our Business Advisory Services team shares their thoughts on how defined benefit plans work and who they benefit the most.