You’ve got a long list of things to do, taking care of your business, your home, your family, and if you’re lucky, you’ve got a little time left to take care of yourself. One of the best ways you can look out for your own future is to plan for your retirement, especially if you are a small business owner.
If you are trying to prepare for your retirement, then a great place to start is by opening an Individual Retirement Account (IRA) or making regular contributions to your existing IRA. Saving money is always good, but with the associated tax incentives, it is even better to save your money in an IRA.
With a traditional IRA, you do not pay taxes on the amount you contribute to the account nor do you pay taxes on the accruing interest until the point of time when you begin to take money out of your retirement account. For Roth IRAs, you pay income tax on the money that you contribute but then your money is allowed to grow tax-free and there is no tax liability when you reach retirement age and begin to withdraw funds from your account.
As with all good things, there is a limit to what you can contribute to your IRA each year. The limit set by the government for both 2014 and 2015 is $5500. This limit is extended to $6500 for individuals over the age of 50. If you didn’t make a contribution in 2014, you only had until April 15, 2015 to make a contribution attributable to 2014. You have to watch the calendar and make contributions within the time frames, so if you missed it, today is a great day to make your future a priority…and to encourage your employees to do the same.
You can set it up so contributions are handled through your payroll. Of course, if your payroll service is the The Payroll Department, we can help you make that happen and keep the records you need for year-end reporting. Even if you don’t match employee contributions, an IRA or 401K is a great perk for employees. Contact us for help.
-Jessica of The Payroll Department Blog Team