IRS rules required that the company also offer their dozen employees $50,000 in group term insurance as part of the program, but the small premiums on those plans didn’t count toward the employees’ income. The employees could choose to add a permanent life policy similar Clicking here to the owners’ policy. However, being taxed on those additional insurance premiums didn’t make sense for the staff.
“Money is a tool, and the value that a financial professional provides is in Image source knowing how to use those tools to provide clients with what they want, which in this case was reducing taxes,” Mr. Turner says. “It’s incumbent on financial professionals to Go!!! find out what those hot button issues are Homepage for their clients.”
Putting additional money into their retirement plans wasn’t a good option payday loans online, because the plan structures required that they also contribute more to their employees’ accounts at the same time. That wasn’t the couple’s immediate priority. So Mr. Turner found a solution that specifically benefited them: a Section 79 insurance plan.
They’d worked with financial adviser Michael Turner to defer $100,000 of that income by URL establishing a Safe Harbor 401(k) and a profit-sharing plan. But the couple was interested in reducing their income taxes even further. sarasota dui Read here lawyer
Under Mr. Turner’s plan, the couple’s business purchased separate permanent life policies on the wife and the husband. The policies offered initial death benefits of $3 million and $5 million, respectively, and the premiums totaled $400,000 a year for five years. los angeles dui lawyer
These plans make use of an IRS tax code that allows companies read more to take Clicking here tax deductions on insurance premiums they pay on policies for employees cheap auto insurance quotes. Those premiums count as part of an employee’s compensation, but they are assessed at a reduced tax rate.
So many variables help determine the amount of life insurance you should carry. Do you want to fund your children’s college educations? How much money have you accumulated in savings, and how much of that are you willing to spend after one of you dies? Is there a home mortgage that you would like to pay off? If one of you dies, do you each earn enough to live comfortably on your own without the other’s income? If not, how much additional monthly income would the survivor need?
One last thing in case your health should worsen and make qualifying for preferred life insurance rates impossible: Be sure to get a term life policy that is convertible to a permanent life policy, guaranteed. That means when your price guarantee ends on your term life insurance policy, you are guaranteed the right to continue coverage if you still need it at preferred permanent life insurance rates.
The policy also will provide the couple with tax-free retirement income from a cash-value component of the policy that grows based on an index’s performance, usually the S&P 500. Once the couple retires, they’ll be able to make withdrawals against that read cash value, which are tax-free because Click here! they are considered “loans” that are deducted against the death benefit.