Running your own C or S Corp is awesome. You call the shots, make the money, and never have to deal with annoying coworkers microwaving fish in the office kitchen. But when it comes to retirement planning, a lot of solo business owners drop the ball, and Uncle Sam is all too happy to scoop up the extra cash.
Let’s change that. Here’s how to stack your retirement savings like a boss while keeping the IRS out of your pockets.
Best Retirement Plans for a Solo-Owned Corporation
Solo 401(k) – The Heavyweight Champion
If you want the biggest bang for your buck, this is it. With a Solo 401(k), you get to play both employee and employer, which means double the savings power.
2024 Limits:
- Employee contribution: $23,000 ($30,500 if you’re 50+)
- Employer contribution: Up to 25% of your salary
- Total max: $69,000 ($76,500 if you’re 50+)
2025 Limits:
- Employee contribution: $23,500 ($30,500 if you’re 50+)
- Employer contribution: Up to 25% of your salary
- Total max: $70,000 ($77,500 if you’re 50+)
Still time? Yes! You can still make employer contributions for 2024 until your tax filing deadline (including extensions). Bonus: If your spouse is on payroll, they can contribute too. Double win!
SEP IRA – The Simple Workhorse
This one is as easy as it gets. No employee contributions, just straight-up employer contributions (a.k.a. giving yourself a fat retirement bonus).
Contribution Limits:
- 2024: Up to 25% of salary (max $69,000)
- 2025: Up to 25% of salary (max $70,000)
Still time? Yep! You can set up and fund a SEP IRA for 2024 all the way up to your tax filing deadline (including extensions).
Great for those who want big tax deductions without the headache of paperwork.
Defined Benefit Plan – The Power Move
If you’re making serious money and want to really pile up retirement savings, this is the plan for you. It’s the only option that lets you stash away six figures a year with monster tax breaks.
But… there’s a catch. You’ll need an actuary to do the math (yeah, it’s one of those plans). Worth it? Absolutely, if you want to retire very rich.
Still time? Yes! Set it up by December 31, 2024, and you can still contribute for 2024 until your tax filing deadline (with extensions).
Which One Should You Pick?
- If you want high contribution limits and flexibility, go with the Solo 401(k).
- If you want something simple with no hassle, choose the SEP IRA.
- If you’re earning big and want to save the most possible, the Defined Benefit Plan is your best friend.
No matter which one you choose, starting now is the key. The sooner you set it up, the more you keep out of Uncle Sam’s pockets.
Need help figuring out the best plan for you? We help solo business owners like you save more, pay less in taxes, and retire rich.
🚨 Important Compliance Update: BOI Reporting Deadline & FinCEN’s Surprise Announcement
Okay, now for something you can’t ignore.
The Financial Crimes Enforcement Network (FinCEN) just hit the pause button on BOI report enforcement, but that doesn’t mean you’re off the hook.
Here’s the deal:
- The March 21, 2025, deadline is still in place. You still need to file.
- FinCEN is just delaying penalties for late filings; for now.
- If you own a C or S Corporation, you likely must file unless you qualify for an exemption.
Think of this like getting an extra grace period on a speeding ticket. You won’t get fined immediately, but eventually, they’ll catch up with you.
Best move? Get compliant now, so you don’t have to stress about it later.
If you’re not sure whether you need to file, don’t guess. We can help.
Final Thoughts
Planning for retirement isn’t just about saving for the future; it’s about paying less in taxes today and keeping more of what you earn.
At the same time, staying compliant with new regulations like BOI reporting will keep your business out of trouble.
We can help with both. Schedule a quick call today, and let’s make sure your money is working for you, not against you.
Want to keep more of your money and sleep better at night?
Let’s talk. We’ll help you choose the best retirement plan and make sure you stay compliant with BOI reporting.
To your success,
The Solution 8020 Team
