Newspapers / The Charlotte Post (Charlotte, … / March 9, 1989, edition 1 / Page 3
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BUSINESS rn/s week Thursday, March 9, 1989 - THE CHARLOTTE POST - Page 3A Self-Employed Can Make Own Breaks SHOP THE CLASSIFIEDS TODAY AND YOU MAY FIND THE RIGHT JOB FOR YOU! PAGE lOB I'd like to direct this week's Fi nancial Corner to you self- employed entrepreneurs and small business owners who got an unpleasant surprise at tax time last yean you who are stUl trying to detect every little de duction to help reduce this year's burden. I'm sure most of you strategically prepared your selves last year for optimum tax savings and yet you feel that Uncle Sam. vdll get the best of you again. You sheltered your Income, positioned yourself for business deductions, and contributed to an IRA. You also took advantage of the tax advantages of setting up a pension plan...or did you? An individual with self- employment income from per sonal service in any tax year may establish his or her own quiifled retirement plan in ad dition to a personal IRA. A sole proprietor or a partnership is qualified to establish such a plan. Even a person who is sal aried but earns additional out side compensation, such as consulting Income or corporate dlrector;s fees, may establish a plan based on that outside in come. Such plans provide an im mediate tax deduction, as well as tax deferral for all Income The Financial Comer with Marcus Butts earned by plan assets. Self-employed Individuals can establish the same type of re tirement plan(s) which were previously only available to cor porations, such was profit shar ing, money purchase pension, defined benefit and defined con tribution pension plans. These plans permit contributions far in excess of the previous Keogh limits and allow more flexibility In plan design. Self-employed individuals can also establish a Simplified Employee Pension (SEP) - a low-cost alternative to a regular pension plan. Poten tially, an SEP can provide you the opportunity to make tax- deductible contributions in an amount up to 15 percent of com pensation or $30,000, whichever is less. Most employers, and self- employed individuals, are eligi ble to adopt an SEP. Under an SEP, each eligible employee will adopt his or her own Individual Retirement Account (IRA) to which the employer may con tribute each year. This IRA is sometimes referred to as an SEP-IRA. As I mentioned an SEP can serve as an important tax planning tool since contri butions made to an SEP are not only tax-deductible to the em ployer, but are not taxable to the employee until withdrawn from the employee's IRA. Earnings also accumulate in the employ ee's IRA on a tax-deferred basis. Thus, the funds can grow at a much greater rate and provide a larger pool of capital for retire ment than if they were currently taxed. The main advantage of an SEP over other t)q)es of employer- sponsored retirement plans is that an SEP is easier to estab lish and easier to administer. Establishing an SEP simply involves completing a simple adoption agreement like the IRS Form 5305-SEP, giving copies of those completed forms and ac companying disclosure material to your eligible employees and making sure that each employee establishes wan IRA to which you will make SEP contribu tions. SEPs have been exempted from memy of the federal regula tions and IRS filing require ments which apply to other types of tax-qualified programs. Once the employer has made a contribution to the employee's SEP-IRA account, he or she need not have any further re sponsibility for the administra tion of the account. Further more, since an SEP permits employees to direct the invest ment of their own IRAs, the em ployer has no responsibility for such investments and avoids many of the fiduciary duties nor mally associated with a quali fied employee benefit plan. If you have any questions about SEPs or comments about investments, please direct your letters to Marcus Butts, c/o The Charlotte Post, P. O. Box 30144, Charlotte, NC 28230. CONCRETE All types, 35 years experience Call AB.C. 567-0819 •DrivewayTS •Garage Slabs •Porches •Patios •Garages Built Low Prices FREE Estimates' Mahogany Is Now On Sale The 1989 edition of Mahogany — A Shopping Guide of African- American Businesses and Pro fessionals , a publication cover ing the Charlotte-Mecklenburg area is now available. Through its listings. Mahoga ny offers immediate access to products and services provided by African-Americans, from A to Z. The directory covers the black business community, churches, attorneys, organiza tions and much more. The cost of the publication Is $5 plus $1 postage and handling. To purchase a copy of the di rectory. write Mahogany, P.O. Box 33204, Charlotte, NC, 28233, or caU (704) 373-1808. The directories are also availa ble at the Afro-American Cultu ral Center, 401 N. Myers St. Anti-Redlining Strategy Planned Have you ever tried to get a loan, but were turned down for no valid reason? If so, you may be a victim of red lining, a system by which banks discriminate by refusing to lend money to people living in particular neighborhoods. The Charlotte Organizing Pro ject is meeting with several groups on Saturday, March 11, 10 a.m. to 2 p.m. at First Baptist Church-West, to research and develop a strategy for dealing with banks that will not lend money in neighborhoods most in need of resources for housing and businesses. The public is invited to attend. There will be a free lunch and transportation will be provided if requested. For more information, contact Jane Burts at 372-0675. Harvey Gantt, Managing Partner of Gantt-Huberman Associates, was the guest speaker at the recent BEEP (Black Executive Ex change Program) held at Johnson C. Smith University. JD HAIR and SCALP Analysis Call: (704)392-0026 Ask For: Mr. Beckwith My Retirement Gift To Cosmetologist BEEN IN S BEATTIES FORD RD. 393-3333 PAIN FROM ACCIDENT MAY NOT START FOR DAYS. WEEKS OR MONTHS AFTER AN ACCIDENT.SEE US ANYTIME YOU ARE IN AN ACCIDEJNT. you are ALWAYS WELCOME. WE ACCEPT INSURANCE Some • Quality. • America’s Largest Service Organization. Best-selling brands like Kenmore* Cra^man and DieHard that are available exclusively at Sears. Satisfaction Guaranteed or Your Money Back for over 100 years. Yourmonev^ worth and a whole lot more. U- mmrnam ■k
The Charlotte Post (Charlotte, N.C.)
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March 9, 1989, edition 1
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