Here’s another one from the vault:

A prospective client called me with a common question: “I’m Joe. My accountant says the maximum contribution a business owner can defer into a retirement plan is 25% of their earned income. But a friend told me that some professionals defer well above that. He told me to call you.”

“Yes, there is a way,” I told him. “If you qualify, we can design a cash balance plan that actually allows you to deduct up to100% of your earned income. That means zero income tax for that year!”

I heard Joe’s silent disbelief and continued. “And that’s not a one-time deduction. If you qualify once, you should be able to get a 100% tax deduction for at least the next 10 years.”

“Wow!” said Joe. “What do I need to do to qualify for that?”

“Set up a meeting and we’ll look at your numbers,” I suggested. “Not everyone can contribute a full 100% of their income but our team consistently sets up plans with tax deductions of greater than 50%. That’s more than double what most of them thought was possible.”

If you’ve maxed out your retirement contributions at 25%, talk to a professional retirement plan consultant. You just might be able to reduce your taxable income to ZERO!