Taxes Or Tax SavingsAs we enter into the 4th quarter of the year, many business owners are still feeling the sting of the large 2013 tax increases, which took a big bite out of their bottom line. As they review the current year with their money managers– Advisors and CPAs—looming on the horizon is the inevitable round of tax hikes.

Wouldn’t they be thrilled if you had a solution that could help them alleviate their huge tax issue? The solution may be implementing a Split-Funded Defined Benefit Plan before New Year’s Eve to reserve a major tax-deductible contribution for the 2014 tax year.

This is the right time to discuss the possibility as the majority of business earnings are in for the year. In addition, the business owner is starting to formulate how much of those dollars are going to be subject to a large tax hit. Now is the opportune moment to get a Business Owner’s attention, when they are likely to be focused on tax solutions.

For calendar year companies, the rules are very simple as it relates to “reserving a 2014 deduction.” Simply put, if this strategy is viable and the Owner would like to secure a large deductible contribution there is ample time on the calendar to do so.

All that is needed by December 31st is basic installation paperwork. In turn, our Actuarial team will be able to produce the key item per IRS rule. That key item is a customized Plan document with a 2014 date stamp on it. The Plan document must be sent out by our Actuaries for signature and adoption by December 31, 2014.

Just to clarify, the actual funding of plan accounts is not required by that date, only the Owner’s sign-off. This is the key element in “reserving the deduction” for tax year 2014. The actual funding of the Plan(s) can be done in 2015 with filing extensions. However, the critical part that has to meet the December 31st deadline is the business’ creation, adoption, and execution of the Plan document.

That’s why the 4th quarter is “go” time to get the ball rolling for high-income business Owners… the clock is ticking to comply with the rules. While we all get wrapped up in holiday hoopla, the critical cut-off date for tax deductions looms large. Once the clock strikes midnight on New Year’s Eve, you will have to wait until the following year to implement a plan.

How would you like to be the one to break the news to your client that instead of keeping those tax savings working for you in a Split-Funded Defined Benefit Plan, you will be sending that money to Uncle Sam? So, here’s your plan of action: make an entry in your iPhone calendar with this subject line: “Tax Savings Clock is ticking.” Tick, tock, tick, tock.


About Us

We are pioneers in retirement planning, featuring tax-advantaged defined benefit pension plans as exit strategies for high net worth clients. We partner with top industry Advisers to bring their clients preferred solutions to achieve large income tax deductions.


Coral Gables, FL

Call Us

Phone: 1-800-717-4723

Working Hours

Monday-Friday: 9:00am – 5:00pm

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