|So, what are the benefits of
a 412 i plan whether it be a prototype or custom. As with other qualified retirement plans, the 412(i) confers
immediate benefits to the plan participants.
|Annual or quarterly
contributions the business makes are fully tax deductible. Given that these contributions can be as
much as $300,000 per year, that can represent a considerable income tax
savings. In this way, the government is helping the participant fund 30 to 40
percent of his or her retirement plan.
|Heres another significant
advantage to the 412(i): not only does it allow you to make much larger
contributions than you could with other qualified plans, but it also allows
you to continue making plan contributions even after the traditional maximum
allowable retirement age of 70 ½.
|Again, just like other
qualified plans, its assets grown income-tax-deferred.
|The annual benefits can be
as high as $165 K. This can result in
a sizeable deduction for each year of the plan.
|And, wonderfully, the
contributions do not generate an AMT situation.
|And, last but not least,
this year you get a $500 tax credit to boot.