You could save thousands with the 401(k) tax credit.
We've helped businesses find $150 million in tax credits. The 401(k) tax credit is a win-win: Provide a better financial future for your team, and save big - just another reason to create a Gusto account.
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Businesses may lower 401(k) administration expenses to $0 for the first 3 years.
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What is the 401(k) tax credit?
Technically called the Credit for Small Employer Pension Plan Startup Costs, the 401(k) tax credit can reduce the amount of taxes you owe on a dollar-for-dollar basis. Eligible employers may be able to claim up to $5,000 for 3 years for the necessary costs of starting an SEP, SIMPLE IRA, or other 401(k) plan, with additional credits available for auto-enrolling and employer contributions. If you qualify, Gusto can quickly generate your form 8881 for you.
Employees using Gusto are 40% less likely to leave in the first year when offered 401(k) retirement benefits.1
Want to learn more about the 401(k) tax credit? We’ve got you covered.
A tax credit is a dollar amount that can be subtracted from the amount you owe in taxes. Every business owner wants to save money on taxes, which means that you should know if you qualify for a tax credit and how to claim it. Gusto can help you with that.
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Providing employee retirement benefits is an amazing tool employers have in their arsenal to help their teams save for the future. When you sign up with Gusto, we can help you painlessly set up a 401(k) retirement account that takes superb care of your team.
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First, you’ll need to see if you qualify. We’ll help you determine if your business is eligible and how much of the credit you qualify for. Next, we’ll use the info we have to automatically generate your tax credit form. You file it with the IRS, together with annual income tax forms. After the IRS processes your claim, you may have as low as $0 in expenses for administering a 401(k) plan.
Accountants should discuss the potential tax benefits of implementing a 401(k) program with their small business clients. One obvious benefit of 401(k)s is more financial security for employees. In addition to employee satisfaction, 401(k)s also offer tax savings for individuals and businesses.
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1According to Gusto's report, One Secret to Retaining Top Talent? Offering Retirement Benefits.