ADVISORY FINANCIAL SERVICES

 

Advisory Financial Services is a bi-coastal fee only comprehensive financial services firm a Registered Investment Advisory with over 30 years financial services experience committed to helping our clients improve their long-term financial success. 

Contribution limits in a one-participant 401(k) plan SELF EMPLOYED BUSINESS OWNER ALERT !!    LOOKING FOR TAX DEDUCTIONS 

The business owner wears two hats in a 401(k) plan: employee and employer. Contributions can be made to the plan in both capacities. The owner can contribute both:

                              2021 contribution limits vs. 2020

 

• For 2021, the contribution limit for employees who participate in a 401(k) plan is $19,500, the same as 2020.
•  
• Employees aged 50 or older can take advantage of catch-up contributions. In 2020, the IRS raised the limit on catch-up contributions by $500 to $6,500 from $6,000. This, too, is unchanged in 2021.
•  
• Workers over the age of 50 can set aside a total of $26,000 in their 401(k) in 2021, unchanged from 2020.

• These limits apply to other retirement plans, such as 403(b) plans for employees of public schools and nonprofit organizations, as well as the federal government's Thrift Savings Plan (TSP)

• There is an upper limit to the amount you can contribute to retirement plans of all types. For those age 49 and under, the limit is $58,000 in 2021, up from $57,000 in 2020. For those 50 and older, the limit is $64,500, up from $63,500 in 2020. You can't contribute more than your earned income that year.

• New Accounts must be set up prior to December 31 each calendar year but not funded until the next tax filing deadlines usually April 15 .....  CALL NOW FOR MORE DETAILS (949) 429 6408