#232: Tactical Tuesday: Two Factors that Impact your Earnings as a Business Owner: Tax Rates & Retirement Planning

<p><strong>OVERVIEW:</strong></p> <p>Jason A. Duprat, Entrepreneur, Healthcare Practitioner, and Host of the Healthcare Entrepreneur Academy podcast, talks about two factors that influence how much you should pay yourself as a business owner. This episode references Tactical Tuesday #231 where Jason explains how to leverage tax benefits through an S Corp. In this episode, Jason continues to discuss additional factors to consider: your FICA tax rate and retirement planning.  </p> <p> </p> <p><strong>EPISODE HIGHLIGHTS:</strong></p> <ul> <li>Paying yourself through an S Corp. is a tax-saving strategy.</li> <li>It’s important to know your retirement goals because that’s going to play into how you set your W2 income.</li> <li>There are two types of retirement plans. A self-employed IRA and the contribution limit is 25% of your salary. And there’s a Solo 401K or Individual 401K, which is currently capped at $19,500.  </li> <li>With the Solo 401K, you can contribute on your own and the business can also contribute, which is capped at 25%.</li> <li>Each type of plan has a different set of rules, regulations, and limits around it.</li> <li>One thing to consider is if you set up a company contribution at 25% for your own retirement goals, you’ll need to do the same for your employees at the same rate.</li> <li>Tax savings for your business is only one side of the equation. Planning for retirement is another so be sure to hire a consultant to guide you through both areas. </li> </ul> <p> </p> <p><strong>3 KEY POINTS:</strong></p> <ol> <li>The way you set your W2 salary is going to be the biggest driver not only in your taxes in terms of FICA, but it's also going to be a factor in how much you can contribute to your retirement accounts.</li> <li>If you set your W2 salary too low, you're saving some FICA tax, but at the same time, you're limiting your ability to contribute to your retirement account.</li> <li>You have to match how much company contribution you’ve set up for yourself before you had employees for all employees