At tax time, discovery of profit means reinvesting in the future of your practice.
I recently met with my accountant to prepare our taxes return for the past year. Turns out, we made a profit (yeah!). That, of course, means we have to pay taxes (boo!)
After going through deductions for business expenses, we started talking about retirement plan options for my employees and me. My accountant makes it sound fairly simple to set up. We can still make contributions that will affect last year’s taxes. He will help me with setting it up, and someone else will manage it, although I have the option of doing so. I have no desire or aptitude for such a thing, and will defer to an expert.
Bottom line? It will cost me more in absolute dollars to contribute to a retirement plan for everyone than it will to pay taxes. However, I think my staff will appreciate the plan, plus it will foster longevity and loyalty. And it helps me put a little something away for me.
I had thought about doing this last year, but we hadn’t made a profit and didn’t have the funds. This year, we are fortunate. And I will share this good fortune with the people I work with.
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