Retirement Moves You Can Still Make for 2024 Taxes

12 snips

Jan 15, 2025

In this engaging discussion, retirement expert Matt Ruttenberg from LifeInk Retirement Services shares invaluable insights on optimizing retirement contributions for tax savings in 2024. He emphasizes key deadlines for both individual and employer contributions, shedding light on strategies like solo 401(k)s and profit-sharing plans. Matt explains how understanding these rules can drastically reduce tax liabilities. He also highlights the importance of early planning and the benefits of working with professionals to maximize retirement benefits.

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ADVICE

Profit Sharing

Employer profit-sharing contributions can be made until the extended filing deadline.
Explore strategies like "new comparability" to maximize owner benefits.

ADVICE

Defined Benefit Plan Setup

Defined benefit plans offer high contributions (up to $300,000) but require setup time.
Contact a retirement expert at least 45 days before filing (longer with employees).

ADVICE

Defined Benefit Commitment

Defined benefit plans are multi-year commitments, not one-time fixes.
Consider this only if you can commit beyond the current tax year.

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Are you maximizing your tax savings while building your retirement plan, or leaving opportunities on the table?

In this episode, Mike Jesowshek is joined by Matt Ruttenberg to discuss strategies for reducing your 2024 tax bill through retirement contributions and planning. They highlight key deadlines for individual and employer contributions, such as the April 15th cutoff for IRAs and the extended filing deadlines for employer contributions. They also delve into options like solo 401(k)s, safe harbor plans, and cash balance plans, emphasizing the importance of early planning and ongoing consultation to maximize tax savings and retirement benefits.

[00:00 - 02:17] Introduction

Mike welcomes Matt Ruttenberg back to the show as a trusted retirement expert.
Discussion begins with how the new year presents opportunities to address past tax planning mistakes.

[02:18 - 05:59] IRA Contributions

Deadlines for Roth and traditional IRAs are April 15th.
Contributions are based on individual earned income, not business profits.
Lesson: Plan IRA contributions early, as extensions don't apply.

[06:00 - 10:14] Profit Sharing and Employer Contributions

Employer contributions for profit sharing plans can be made until the extended filing deadline.
Different strategies, such as "new comparability," can maximize owner benefits.

[10:15 - 13:28] Solo 401(k)s and New Rules

First-year solo 401(k) participants can contribute employee portions up to April 15th.
This rule applies to sole proprietors and single-member LLCs, not S-corporations.

[13:29 - 16:11] Safe Harbor and Compliance

Safe harbor plans help owners and highly compensated employees avoid compliance issues.
A 4% non-elective contribution can be made post-deadline to improve compliance.

[16:12 - 24:33] Advanced Plans: Cash Balance and Defined Benefit

High-income businesses can use defined benefit plans for contributions up to $300,000.
These plans require actuary involvement and multi-year commitments.

[24:34 - 31:16] Key Takeaways and Planning for 2025

Employer contributions can be made until the filing deadline, including extensions.
2025 should focus on proactive tax planning to avoid last-minute issues.

Direct Quote:

"All 401(k) plans are not created equal; work with someone who knows the options available to you." - Matt Ruttenberg

Build a custom 401(k) for your business by visiting https://lifeincrs.com/tax-savings-podcast/

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Podcast Host: Mike Jesowshek, CPA - Founder and Host of Small Business Tax Savings Podcast

Join TaxElm: https://taxelm.com/

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