With a strong background in finance, Steve specializes in retirement taxation planning and income tax audits for individuals and businesses. His excellent communication skills make good plain sense out of the perplexing barrage of tax laws that many of our clients face every year. It’s no wonder that so many small business owners ask for Steve by name.

THE SITUATION
A client had established a basic profit sharing plan that met his needs in the early years of his practice, making annual contributions to himself and his employees based on compensation. This worked well as the employees either had low earnings or they had not worked there long enough to be eligible to participate.

THE PROBLEM
Over time as the business grew and employee’s wages and eligibility increased, the percentage of the total contribution to the plan that was going to the owners account had fallen to 65%.

THE SOLUTION
Working closely with the third party administrator the plan was redesigned with a 401(k) deferral component to meet the “safe harbor” requirements. The employer committed to a 3% fully vested non-elective contribution to eligible employees.

In 2003 the portion of total contribution to the owners account was over 82%. The employees still received a healthy contribution and had the opportunity to supplement with elective deferrals from their salary.

return to main dialogue page