Last chance to set up a Solo 401k for small businesses for 2015 contributions

Self employed business owners’ last chance to save thousands of dollars in taxes

As year-end is approaching, many business owners and self employed professionals are looking for ways to save on taxes this year. A simple way of doing so is to set up a Solo 401k for small businesses, which allows plan owners to save for their retirements and enjoy tax benefits while doing so.

The Solo 401k for small businesses is a qualified retirement plan designed for small businesses without any full time employee, rather than the owners and their spouses. To qualify for the Solo 401k plan, business owners only need to show a self employed business activity. This can be a side business, a freelancing gig, or consulting service.

There are many benefits to setting up a Solo 401k plan, one of which is the tax benefits that it offers. The plan can accept up to $59,000 in contribution each year as of 2015. This means plan owners can reduce their taxable income by up to $59,000 and save a significant amount of tax payment for the immediate year. Taxes are only taken out during retirement when plan owners start withdrawing from the plan.

To make contributions for the year, however, business owners need to set up the plan before the Solo 401k deadline. For 2015, the Solo 401k plan needs to be set up by December 31, 2015. Any plan set up after this date will only be able to receive contributions for the year of 2016.

The good news is, after setting up the plan, plan owners will have more time to arrange contributions into their account. The Solo 401k contribution deadline for 2015 is up to the tax-filing deadline of the business. That means owners of LLCs, partnerships or sole proprietorships can make contributions up to the personal tax filing deadline of April 15, 2016. Owners of corporations can contribute to their Solo 401k until March 15, 2016.

With Solo 401k deadlines approaching, Sense Financial recommends business owners to plan ahead and take action quickly. Having a Solo 401k plan is the first step that leads to generous tax benefit now and financial security in the future.

Sense Financial is California's leading provider of retirement accounts with "Checkbook Control": the Solo 401k and the Checkbook IRA. Over the years, they have assisted hundreds of clients to obtain checkbook control over their retirement accounts while providing them with the ability to invest in virtually any investment class, including real estate, private lending, mortgage notes and much more without the need for custodian approval.

To learn more about Solo 401k, please visit sensefinancial.com.