A recent tax law permits the owner/ partner/shareholders of a small business, and their spouses, to maximize contributions if net compensation is less than $160,000 (indexed for 2002).

Eligibility

Employee eligibility requirements are typically limited to attainment of age 21.

Contributions

Contribution types and limits are the same as those for a 401(k) profit sharing plan.

Advantages

Filing a Form 5500 is not required until either the total plan assets exceed $100,000 or an employee other than an owner/partner/ shareholder or their spouse enters the plan. Additionally, discrimination testing is not required until an employee other than an owner/partner/shareholder or their spouse enters the plan.

Download our Qualified Plan Comparison chart (.PDF format) to compare this product to other Qualified Retirement Plan options.

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