A profit sharing plan is a creative strategy to motivate and reward your employees. Profit sharing plans are defined contribution plans that allow you as an employer to assess your company’s finances at the end of the year before deciding on an amount you want to contribute to your employee’s retirement accounts. These contributions are tax-deductible for employers.
Profit Sharing Plans with Watkins Ross
A profit sharing plan is available to any size business and can be implemented even if the employer offers other retirement plans. In fact, a profit sharing plan is often offered in conjunction with the company’s 401(k) plan. Unlike matching contributions that are based on the amount the employee defers into the plan, Profit Sharing contributions may be made regardless of whether the participant is deferring into the plan (as long as they have met the eligibility requirements).
While frequently allocated based on compensation, these contributions may be allocated in any nondiscriminatory manner specified in the plan document. A profit sharing plan is sometimes paired with a defined benefit plan to maximize contribution disparity and benefits for business owners. These are known as DB/DC combo designs.
At Watkins Ross, we partner with you to clearly define your objectives and design a plan that is ‘right’ for your business. We are not only experienced in administration and consulting for profit sharing plans, we clearly communicate the regulations so that you can focus on the success of your business.
Tom J. said:
“Professionalism at the highest level, along with prompt service and attention to every detail. This creates a relationship based on trust, knowing the job will be done right and we do not need to worry about a thing.”