Lawn Care Biz Tips Part II: One-Participant 401Ks

October 26, 2021

In this video

• Overview of one-participant 401(k) plans

• Why these plans are a smart way to lower your taxable business income

• A brief explanation of compound savings

In my last video, I explained why buying equipment is not always the best way to lower your business’s taxable income.

Today, I want to present an alternative way to do this: Starting a one-participant 401(k) plan.

A one-participant 401(k) plan allows you, as the employer and employee in this situation, to set aside some of your business earnings and transfer it to your retirement account.

This means your taxable business earnings are lowered, but the beauty of it is that you get to keep that chunk of money as a contribution towards your future.

Even better? Depending on what you invest in, your one-participant 401(k) fund will grow over time, thanks to a financial phenomenon called compound interest.

Watch this video to hear me go over what this all means.

 

Next time we’ll talk about just how you can sign up for one of these plans. Stay tuned!

For a deeper understanding of one-participant 401(k) plans, check out these resources provided by the IRS.

If you like this video, be sure to share it with your fellow pros.