As we continue to grow and continue to be Loud, will always appreciate you for taking 5-10min of your day to read what I have to say, thank you!

This week I encourage you to buckle in and learn more about Secure Act 2.0, so you can take advantage of it!

Happy 4th!! If you are awake yet, enjoy the read, if you are not well WAKE UP!

Small Business Tax Incentives

First up, SECURE Act 2.0 doubles the tax credits for new retirement plans for small businesses. If you have up to 50 employees, you'll now receive a tax credit of 100% of your plan start-up costs, which is a significant increase from the previous 50% credit. And here's the best part: this tax credit is capped at $5,000 per employer annually for the first three years! That means you could potentially receive a total of $15,000 to help you get your retirement plan up and running smoothly. Even businesses with 51 to 100 employees can benefit from the original SECURE Act tax credits, which are equal to 50% of administrative costs and also capped at $5,000 per employer for three years.

But that's not all! SECURE 2.0 expands the eligibility for the start-up tax credit. Now, employers can qualify for the tax credit based on the year they join existing multiple employer plans, not just when they join new plans. This means more businesses can take advantage of the tax benefits, even if they decide to join an established retirement plan.

In addition to the increased tax credits, SECURE 2.0 introduces new credits for employer contributions. If you have a small business with up to 50 employees, you'll now receive a tax credit based on a percentage of your employer contributions, up to $1,000 per employee. This credit applies to employees who made less than $100,000 in the previous year. However, it's important to note that employer contributions as elective deferrals or to a defined benefit plan are not included. For businesses with 51 to 100 employees, there is a credit phase-in based on a percentage of 2% points for each employee beyond 50 employees in the preceding taxable year. This credit is phased in at different rates over a five-year period, providing gradual support to help you navigate the transition.

And guess what? The tax credit for using auto-enrollment is still available! If you choose to elect auto-enrollment for your retirement plan, you can receive a tax credit of $500 per year for the first three years. This credit is an additional incentive to help you encourage your employees to start saving for their future.

These changes are designed to make it easier and more beneficial for small businesses to offer retirement plans. By expanding tax credits, increasing incentives, and providing support for employer contributions and auto-enrollment, the government is encouraging businesses like yours to prioritize retirement savings for your employees. It's a win-win situation!

Solo K’s (401ks for solopreneurs)

You know how you can create and fund certain SEP IRA accounts after the year ends? Well, guess what? The rules just got even better! Let's dive into the details.

In the past, taxpayers could create and fund SEP IRA accounts for the previous year until the individual tax filing deadline (plus extensions). That means if you created a SEP IRA in June 2022, you could have contributed money for the year 2021, even if the plan didn't exist at that time. It was a cool way to catch up on retirement savings!

But wait, there's more! The original SECURE Act expanded this retroactive treatment to other employer-funded plans, like Profit-Sharing Plans and Pension Plans. That was a big deal for many hardworking folks looking to secure their financial future.

And now, with SECURE 2.0's Section 317, they've taken it one step further! Sole proprietors and businesses treated as such under Federal law (like Single Member LLCs) can now establish and fund solo-401(k) plans with deferrals for a previous tax year. How cool is that? You have until the due date of your individual tax return (without extensions) to make those contributions.

So, what does this mean for you? Well, historically, there wasn't much urgency to set up solo-401(k) plans early in the year. But now, if you're a sole proprietor, it's time to consider taking action! You have the opportunity to make retroactive deferrals for the prior tax year. It's like a superpower for boosting your retirement savings!

Don't let this chance slip away. If you're a sole proprietor, give it some serious thought. Consider establishing your solo-401(k) plan early in the year and make those retroactive deferrals count.

Next Week’s Issue

We will focus on all of the Roth updates as well as educate you on wtf a Roth IRA or Roth option inside your 401k actually is and how it benefits you!

Hottest Tweet of the Week….

Credit Score means a lot in our society, so why not get your children started immediately and give them a leg up in this tough ass world? I know we have, now it’s your turn!

#NoBSWealth Can’t Miss Episode

In prelude to our next week’s episode, let’s go back to another energy guru, Mr. David Jones with Lumena Energy

Cannot wait until next week or just want more, check out our podcast @nobswealth and catch us on Youtube. You can always follow me on Instagram and Twitter as well! Or just email me, [email protected].

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