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Small Business Retirement Plans: Help From IRS

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By Minara El-Rahman on November 10, 2009 12:05 PM

While many small businesses want to hire more employees, many small business owners feel that they can not afford the benefits that come with a new hire.

A press release from Intuit, Inc. states that: "The latest Intuit Payroll survey from Intuit Inc. (Nasdaq:INTU) finds that nearly half of the small business owners surveyed, 44 percent, are planning to hire new employees within the next 12 months. At the same time, many small business owners believe that benefits are key to attracting new hires but are finding them difficult to afford."

Many small business owners say that they are in a bind. In order to attract the talent that they need in order to succeed, they need to offer benefits such as healthcare and retirement benefits.

The tougher of the two is definitely retirement benefits: "Employer-provided retirement plans are even scarcer. Among the businesses surveyed just one-fourth offer retirement benefits. Of those who don't, nearly two-thirds said they don`t have a responsibility to do so while the remainder said that they can`t find an affordable plan."

It turns out that small business owners have a resource to turn to now. The IRS has set up a very useful website to help small business owners set up retirement funds for their employees.

You can get information on the different retirement plan options, maintain plans, and correct common plan errors.

You can check it out here: IRS Retirement Plans Navigator

Here some benefits for setting up a retirement plan for your employees:

  • Employer contributions are tax deductible.
  • Assets in the plan grow tax-free.
  • Assets grow with compounding interest.
  • Businesses may receive tax credits and other incentives for starting a plan.
  • A retirement plan can attract and retain better employees, and consequently reduce new employee training costs.

As you can tell, there are quite a few benefits for small business owners. Make sure to visit the site and plan out what to do with your own employees.

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