Establish A Tax-Favored Retirement Plan
If your business doesn’t already have a retirement plan, now might be a good time to establish one. If you’re self-employed and set up a SEP-IRA, you can contribute up to 20% of your self-employment earnings, with a maximum contribution of $61,000 for 2022 (up from $58,000 for 2021). If you’re employed by your own corporation, up to 25% of your salary can be contributed to your account, with a max contribution of $61,000. If you’re in the 32% federal income tax bracket, making a maximum contribution could cut your federal tax bill for 2022 by $19,520 (32% times $61,000). In addition to a SEP, there are other retirement plan options. We can provide information on the best one for you.