Welcome to Executive Benefit Plans, Inc.

 

Corporate Brochure Click Here

Tax Deductible Limits for 401(k) Plans

What are the tax-deductible limits for 401(k) plans?

Recent tax legislation allows employers to deduct up to 25% of eligible compensation as an employer contribution to their 401k profit sharing plan. The total employer contribution includes both matching and profit sharing amounts.

Many of our client's have the means and desire to contribute and deduct larger amounts than the 25% of compensation limitation. This can be accomplished using a dual plan strategy where a defined benefit plan is established to operate in concert with a 401k profit sharing plan.  This dual plan design creates a synergy for increased pension benefits and the resulting deductibility of the contribution.

If this is of interest to you please read the article in our 'white papers' section written by one of our actuarial providers, 'Cash Balance Add-On.'  As this is a more complex design strategy we encourage you to involve your CPA firm in the decision making process.

This information is of a general nature and is subject to change. It is provided to give you a broad overview of these matters and should not be construed as legal advice. It is not our position to offer legal or tax advice. You should consult with a tax advisor about your particular situation.

Topical Articles of Interest:

Funding Options  |  Contact Us  |  Proposal Request

Plan Testing

Select this link Tests Overview

    Select this link ACP/ADP Tests

    Select this link Failed ACP Test

    Select this link Failed ADP Test

    Select this link Multiple Use Test

    Select this link Minimum Coverage

    Select this link Affiliated Service

    Select this link Controlled Group

    Select this link Top-Heavy Test

    Select this link Covered Employees

    Select this link Part-time Employees

    Select this link Union Employees

    Select this link PEO Client Outside

    Select this link Deductible Limits

Other Links

Select this link Retirement Plans

Select this link Employee Benefits

Select this link Strategies

Select this link White Papers

 

 

Main Link Column
Select this link Retirement Plans
Select this link Strategies
Select this link Employee Benefits
Select this link Individual Benefits
Select this link Participant Info
Select this link White Papers
Select this link Consulting Service
Select this link Proposal Request
Select this link Administration
Select this link Contact
Select this link News
Select this link Blog
Select this link Home
 

 

Information is provided for review and consideration only. Please consult legal and tax advisors for practical advice pertaining to your business and personal situations.

This page was last reviewed and/or updated on Friday, July 03, 2015 05:22 PM

 

Privacy Statement - Executive Benefit Plans, Inc. Copyright 1996 - 2015 All Rights Reserved - Legal Statement
Website Powered by UHSystems