Jump to content

Retro start-up plan


Recommended Posts

sole-prop, taxes for 2023 have been already filed.   I am thinking of still implementing a CB plan retroactively to 1/1/2023, funding it now but taking a full deduction for 2024.  Thus, for 2024 there will be doubled-up deduction.  Income is very high so the numbers fit in.  Am I missing anything here besides the additional level of complexity of decoupling 430 and 404 numbers for a year or two?  Had a crazy week so I am afraid I might be overlooking something.

Link to comment
Share on other sites

Lou, thank you so much - I am glad I asked since I had that gut feeling I am missing something.  I have totally forgot about the 4/15 deadline for adoption, was thinking we would have plenty of time :(.   Amending taxes definitely works but I suspect the prospect will be reluctant, so that might not be the best approach from practical/relationship perspective.  I am going after that double-up deduction approach since it gives an extra year of participation for 415 and the prospect is looking to slow down in 4-5 years.  

Link to comment
Share on other sites

Maybe run a scenario with amending for 2023 and and taking deduction in both years v not amending and taking double deduction in 2024 then let the client decide. If he want "the max now" because he's slowing down in 5 year, you might find the total is more if you deduct in 2023 but you might find the numbers are about the same and the client doesn't want to be bothered with amending. Your MRC for both years is probably going to be the same either way but your max deductible might change because of how the cushion works.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...