TAX SAVINGS
THROUGH
BETTER PLAN DESIGN
401k 401k
SEP
Safe Harbor Safe Harbor
NAME
SEX AGE
Compensation
Matching
New Comp
------------------------------ -
---
------------ ------------ ------------
------------
OWNER......................... M
51 160,000
40,000
51,000 51,000
OWNER'S SPOUSE................ F
50 30,000
7,500
25,425
28,000
------------ ------------
------------
Totals for Principals: $47,500 $76,425** $79,000**
EMPLOYEE 1.................... M
23 21,000
5,250
4,497
1,050
EMPLOYEE 2.................... M
25 25,000
6,250
5,354
1,250
EMPLOYEE 3.................... M
29
27,000
6,750
5,782
1,350
EMPLOYEE 4.................... M
30 29,000
7,250
6,211
1,450
EMPLOYEE 5.................... M
32 30,000
7,500
6,425
1,500
EMPLOYEE 6.................... M
34 35,000
8,750
7,496
1,750
EMPLOYEE 7.................... M
34 37,000
9,250
7,924 1,850
EMPLOYEE 8.................... M
46 55,000
13,750
11,779
2,750
EMPLOYEE 9..................…. M
53 45,000
11,250
9,637
2,250
------------ ------------
------------
Totals for Employees:
$76,000 $65,106
$15,200
401k Deferral
-0
-15,200
-0
------------ ------------
-------------
Employer Contribution for Employees $76,000 $49,906** $15,200**
Employer Tax Deductible Contribution...... 123,500 85,331 53,200
(to the extent allowed by law)
Less Estimated Tax Savings, 35% Rate...... -43,225 -29,866 -18,620
Less Estimated Tax Savings from
Principals' Salary Reduction, 33% Rate.
0
-13,530 -13,530
------------ ---------
------------
Net cost after estimated tax savings......
$80,275 $41,935
$21,050
Contributions for principals..............
47,500
35,425
38,000
Net
Cost/(SAVINGS) of plan after tax
savings
Note: This illustration is not intended to be legal, accounting or financial advice. This is an illustration of a potential
plan design and should be utilized as such. This illustration is based on current regulations and could change if regulations
were to change. Benefit Solutions does not give legal or tax advice.
