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Fall is a useful time for Miami business owners to review retirement contributions alongside projected profit, payroll and cash needs. Waiting until the tax return is being prepared can leave too little time to coordinate plan documents, elections and funding.
The right plan depends on more than the largest advertised contribution limit. Your employee roster, entity structure, eligible compensation and other retirement contributions all affect what the business can do.
Bring your CPA an updated employee list, ownership information, current payroll and a realistic profit projection. Include any employees expected to become eligible under the plan's rules.
If the business has an existing retirement plan, provide its documents and current contribution records. A plan recommendation should account for what is already in place rather than treat every autumn review as a new setup.
Also explain your goals. Are you trying to establish regular savings, make a larger contribution in a strong year or manage the cost of covering a growing team? Those questions help narrow the options worth modeling.
A one-participant, or solo, 401(k) generally covers a business owner with noemployees, or the owner and spouse. It allows contributions in the owner'semployee and employer capacities, subject to the applicable limits and calculations.
The IRS one-participant 401(k) guidance explains that elective deferrallimits apply by person, not separately to every plan. Participation in another employer's 401(k) therefore matters.
If you hire employees, review eligibility before assuming the plan can continue operating as an owner-only arrangement. Give your advisor the actual employment facts and plan terms.
For 2026, the regular employee elective deferral limit for a 401(k) is $24,500. The general catch-up limit for participants age 50 or older is $8,000, while the higher catch-up for ages 60 through 63 is $11,250 where applicable. The IRS 2026 contribution-limit announcement provides these figures.
The combined employee and employer annual additions limit is generally the lesser of 100% of compensation or $72,000, excluding catch-up contributions. The IRS plan contribution limits explain that framework.
These numbersdo not mean every owner can contribute $72,000. Have your CPA calculate theallowed amount using the relevant compensation or self-employment rules.Catch-up eligibility and applicable both requirements need review too.
A simplified employee pension, or SEP, uses employer contributions and has different mechanics from a solo 401(k). Eligible employee participation is an important part of its cost.
The IRS SEP overview notes that contributions generally must use a uniform percentage of compensation for eligible employees. Review the plan's eligibility rules and your roster before focusing on the owner's contribution alone.
Ask for a model showing both the owner's projected contribution and the total employer cost. A plan that looks attractive in an owner-only example may have a different cash requirement in a business with employees.
There is no single deadline that applies to every retirement plan action. Plan adoption, employee deferral elections and employer funding can follow different rules. Entity type, whether the plan is new and the specific contribution also matter.
Ask your CPA and plan provider to identify the applicable deadlines for your situation inwriting. Do not assume that a contribution permitted by a tax-return deadline means every related action can wait until then.
This is why a fall review is useful. It creates time to coordinate payroll instructions, plan-provider requirements and the business's tax projection before the year closes.
A retirement contribution may have a tax benefit and still leave the business short of cash for payroll or supplier payments. Include the proposed funding in the same cash forecast used for operating decisions.
Ask to see two scenarios: the proposed contribution and a smaller amount that preserves more working capital. Compare the projected tax outcome, employee contribution costs and cash remaining in each.
For an corporation or another entity with specific compensation rules, let the CPA calculate the relevant earnings base. The bank balance or total owner distributions should not substitute for that calculation.
Leave the meeting with the plan being evaluated, the calculated contribution range, unresolved eligibility questions and the people responsible for each step. Coordinate tax advice with the plan provider's administration rather than treating either as a substitute for the other.
Levine CPA and Advisors includes retirement strategy modeling in its Miami tax planning services. Schedule a consultation to review your business's retirement plan, contribution capacity and year-end cash needs.
No. Aone-participant plan generally covers an owner with no employees, or an ownerand spouse. Employee eligibility and the specific arrangement must be reviewed.
No. Allowedcontributions depend on eligible compensation or self-employment calculations,plan rules and other applicable limits. Catch-up contributions have separaterequirements.
No. Adoption,elections and funding can have different deadlines. Review the specific planand contribution with your CPA and plan provider before assuming an action canwait.
