You can use this tax-advantage during salary raises with your employees.
Let’s imagine that you and your employee have a tax burden of 9% and 23%, respectively.
demonstrate a strong conviction that your business is going to be around for a long time.
Would you want to apply for a company that could be gone in just a year?
Businesses with 50 to 99 employees and those with 5 to 59 workers will have one year and two years, respectively, to comply after open enrollment for the state-sponsored IRA begins.
Once the IRA is set up and ready for enrollment, the compliance clock will start ticking for all California small business owners.
On the other hand, if the same individual were to contribute the same ,000 to a Roth 401(k) — rather than a traditional 401(k) —then she pays taxes now, but that money would grow tax-free forever.
Nobody can deny the tax benefits of saving for retirement.
And it’s not just workers; it’s also business owners, freelancers and independent contractors.
Regardless of their generation, 60% of independent contractors and small business owners report not saving enough for their retirement.