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Dimov Tax starts financial planning for business owners with the pay the owner takes from the company and the savings the owner holds outside it.
2026 cap on one owner’s yearly 401(k) or SEP IRA contributions, excluding extra 401(k) deferrals at 50 and older
2026 limit on an owner’s salary deferrals to a 401(k)
Extra 2026 deferral at ages 50 to 59 and 64 or older
Extra 2026 deferral at ages 60 to 63
A sole proprietor, or a single member LLC owner without an S corp election, takes draws. The IRS taxes the year’s profit, and adds self-employment tax (Social Security and Medicare) once the owner’s net earnings are $400 or more. As a financial advisor for self employed owners, Dimov Tax sets draws and quarterly estimated tax payments together.
An S corp owner who works in the business takes wages first.
An owner with no employees beyond a spouse can open one. Employee side. The owner defers pay, up to the yearly limit. Employer side. The business adds up to 25% of W-2 pay, or 20% of a sole proprietor’s net earnings after half the self-employment tax. Filing. The owner files Form 5500-EZ for any year ending with $250,000 or more in plan assets.
Who contributes. Only the business, up to 25% of pay or 20% of a sole proprietor’s net earnings after half the self-employment tax. Who is covered. The business applies one rate to the owner and to employees 21 or older who worked for it in 3 of the last 5 years. Paperwork. The business can use Form 5305-SEP if it runs no other retirement plan, and files no yearly plan return.
A cash balance plan for small business owners is a defined benefit plan, one in which the business promises each worker a set benefit. Yearly credit. The business credits each worker’s hypothetical account with a share of pay plus interest. Risk. The business bears the investment risk. Our role. Dimov Tax helps owners judge fit and works with the actuary and administrator.
Plan base. The IRS bases an S corp owner’s 401(k) and SEP contributions on W-2 wages and excludes distributions.
Low salary, smaller share. An S corp owner who takes a low salary also lowers the employer share the business can add.
Salary decision. Dimov Tax weighs Social Security and Medicare tax against contribution limits and the owner’s qualified business income (QBI) deduction when setting the salary.
As a financial advisor for entrepreneurs, Achim von Bodman, CFP®, plans a cash reserve and investments held outside the company. For a sale, Dimov Tax brings in its business sale tax and valuation specialists.
Bring last year’s business return to the first call. Dimov Tax quotes the fee for a financial advisor for business owners upfront and sets it by the depth of analysis and ongoing support.
Excellent tax preparation + financial planning... I have a lot of business plans, personal plans, and questions about how I should structure things.
