Is It Right For You?

You are incorporated, a sole proprietorship, or a partnership. You have a handful of employees or are pretty sure that you'll be hiring in the near future.

You run a tight ship and that's why you want a retirement plan that gives you control of which, if any, employees participate and when their contributions vest. At the same time, you want the ability to contribute on behalf of your employees whenever you make contributions for yourself.

The Tax Benefits of a Profit-Sharing Plan

You may make tax-deductible contributions of up to 25% of all combined compensation for all participants, and earnings are tax-deferred until you make withdrawals. If your business is incorporated, contributions (to either your own or an employee’s account) are counted as a business expense, so you pay less business tax on your net profit. If your business is a sole proprietorship or a partnership, any contributions to an employee’s account are a pre-tax business expense; contributions to your own account reduce your personal taxes.

Additional Advantages

• A flexible plan. You decide each year if and how much you want to contribute.
• You decide how the money in your account is invested. We provide tools to help you develop and implement an investment strategy.
• A plan you control. You may contribute up to 100% of each participant's salary or $49,000 in 2009 (whichever is less).

Your Next Step

Contact a Key Investment Team advisor to help determine if a Profit-Sharing Plan is right for you. Be sure to establish your plan by December 31 (or the end of your fiscal year) and fund it by your tax-filing deadline (generally April 15), including any extensions.

Key Investment Team does not provide tax advice. The structuring of a retirement plan can have significant tax consequences on you and your business. Investors should consult with their tax professional to determine the tax implications of this retirement plan structure.