Retirement
Because of the ups, downs, and other unpredictable changes that are part of life in a small business, sole proprietors need to plan carefully to meet their retirement needs. Having a good retirement plan allows you to build up a solid investment fund outside your business and gain significant tax benefits along the way - and as an added benefit, qualified retirement plans offer some protection from creditors should some unexpected event threaten your business and personal assets.
- Distributions from a pension plan or annuity you or your spouse may currently be receiving payments from retirement plans from former employers, or you may have purchased a commercial annuity that provides you with income. This section will explain the treatment of both periodic or annuity-type pension payments, and lump-sum distributions.
- Lump-sum distributions some special rules and reporting methods apply if you cash out your benefits in one fell swoop.
- Social Security payments if you're receiving Social Security benefits, you'll need to be able to calculate the portion (if any) that is taxable.
- Individual retirement accounts this section also discusses individual retirement accounts, a type of plan that's gotten a lot of attention because of the addition of Roth IRAs to the menu, and the enhanced availability of regular deductible IRAs.
- Pension plan contributions for business owners, we discuss how to deduct your contributions to a business-related retirement plan elsewhere in this Guide.
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