Welcome to LVED Financial Network LLC
a Joint Venture between LVED.com and Tandem Head
401K Plans
A 401(k) plan is a qualified plan that includes a feature allowing an employee to elect to have the employer contribute a portion of the employee’s wages to an individual account under the plan. The underlying plan can be a profit-sharing, stock bonus, pre-ERISA money purchase pension, or a rural cooperative plan. Generally, deferred wages (elective deferrals) are not subject to federal income tax withholding at the time of deferral, and they are not reported as taxable income on the employee’s individual income tax return.
401(k) plans are permitted to allow employees to designate some or all of their elective deferrals as “Roth elective deferrals” that are generally subject to taxation under the rules applicable to Roth IRAs. Roth deferrals are included in the employee's taxable income in the year of the deferral.
What is a Roth IRA?
A Roth IRA is an individual retirement account (IRA) you fund with after-tax dollars. Your investments have the potential to grow tax-free and may be withdrawn tax-free, provided certain requirements are met. Contributions you add to a Roth may be withdrawn at any time penalty-free.
Traditional IRA
Tax-deferred potential
Reduce your taxable income by deducting your contributions, if eligible, and your potential earnings could grow tax deferred.
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SEP IRA
Easy-to-maintain plan for a self-employed individual or small-business owner, with fewer than 5 employees
What is Retirement Planning?
Retirement planning is the process of setting goals for your retirement income, and then creating a strategy to achieve them. It involves identifying your sources of income, setting up a savings plan, estimating your expenses during retirement, and planning for unforeseen events
TAX ADVANTAGES
Two of the tax advantages of sponsoring a 401(k) plan are: Employer contributions are deductible on the employer’s federal income tax return to the extent that the contributions do not exceed the limitations described in section 404 of the Internal Revenue Code. Refer to Publication 560, Retirement Plans for Small Business (SEP, SIMPLE, and Qualified Plans)PDF, for more information about deduction limitations.
Elective deferrals and investment gains are not currently taxed and enjoy tax deferral until distribution.
Different rules apply to each. For tax-favored status, a plan must be operated in accordance with the applicable rules. Therefore, it is important that the employer be familiar with the special rules that apply to its plan so the plan is administered in accordance with those rules. To qualify for the tax benefits available to qualified plans, a plan must both contain language that meets certain requirements (qualification rules) of the tax law and be operated in accordance with the plan’s provisions. The following is a brief overview of important qualification rules. It is not intended to be all-inclusive.
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