Home / For Business Owners
For business owners & physicians
You built the practice. Is your retirement plan keeping up?
A SIMPLE IRA lets you defer $17,000 in 2026. A well-designed 401(k) with profit sharing can hold up to $72,000 per owner, and more with catch-up contributions. A cash balance plan can go further for owners in their 50s and 60s.
2026 limits per IRS Notice 2025-67. Catch-up amounts depend on age, and higher earners must make catch-up contributions as Roth.
2026 contribution capacity, per owner
How much each plan can hold, by age
| Plan | Under 50 | Age 50–59 or 64+ | Age 60–63 |
|---|---|---|---|
| SIMPLE IRA (your deferral only) | $17,000 | $21,000 | $22,250 |
| SEP IRA (employer only, up to 25% of pay) | $72,000 | $72,000 | $72,000 |
| Solo 401(k) or 401(k) + profit sharing | $72,000 | $80,000 | $83,250 |
| Cash balance plan added to a 401(k) | Set by an actuary from age, pay and staff census. For owners in their 50s and 60s, often several times the 401(k) amount. | ||
Sound familiar?
Where owners usually are when they call
"We set up a SIMPLE when we had three employees. No one has looked at it since."
"My return gets filed every year, but no one has designed a plan around what I could put away."
"I'm 58. The practice is worth more than my retirement account."
"I'd do more, but I don't know what it would cost to cover my employees."
Representative questions, paraphrased. Not client testimonials.
Plan design
Six structures we compare
Which one fits depends on your profit, your age compared with your staff, and what you're willing to contribute for employees.
SEP IRA
Very little administration and flexible year to year. Employer contributions only, generally the same percentage of pay for every eligible employee. No catch-up.
Solo 401(k)
For an owner and spouse with no other eligible employees. Employee and employer contributions together. Hiring one eligible employee ends solo status.
Safe harbor 401(k)
Owners can make full deferrals without failing nondiscrimination testing. Requires a set employer contribution that vests immediately.
New comparability profit sharing
Can direct a larger share of profit-sharing dollars to owners, especially when owners are older than staff. Results depend on the census.
Cash balance / defined benefit
Contributions well beyond defined contribution limits for owners about 45 and older with steady profit. Creates an annual funding commitment.
Controlled groups check
If you own more than one entity or share employees or services, the IRS may treat them as one employer. We check this before any design work.
Form 8881 credits
Four federal credits that can offset plan costs
Credits reduce tax owed dollar for dollar. They're generally available to employers with 100 or fewer employees who earned $5,000 or more last year, and at least one eligible non-highly compensated employee.
| Credit | What it covers | How long |
|---|---|---|
| Startup costs (§45E) | 100% of qualified startup costs for 50 or fewer employees (50% for 51–100), up to the greater of $500 or the lesser of $250 per eligible non-highly compensated employee or $5,000 a year | First 3 years |
| Employer contributions (§45E) | Up to $1,000 per eligible employee, for new defined contribution plans. Steps down 100%, 100%, 75%, 50%, 25% for 50 or fewer employees. Wage cap applies. | First 5 years |
| Auto-enrollment (§45T) | $500 a year for adding automatic enrollment, to a new or existing plan | 3 years |
| Military spouse (§45AA) | $200 per eligible military spouse, plus up to $300 of employer contributions for them | Up to 3 years |
Credits are nonrefundable. Startup costs claimed for the credit can't also be deducted. Source: Instructions for Form 8881 (Rev. December 2025). Confirm eligibility with your tax preparer.
For medical & dental practices
Your plan contribution can affect your QBI deduction
Physicians, dentists and other professionals run "specified service" businesses. Above a taxable-income threshold, the 20% qualified business income deduction under §199A phases out, and above the top of the range it's gone.
Because plan contributions lower taxable income, a larger contribution can move some owners back into, or below, the phase-out range. That can make the contribution worth more than your marginal rate alone suggests.
This has to be modeled on your actual return, with your tax preparer. Thresholds are indexed every year.
| 2026 taxable income | Single | Married joint |
|---|---|---|
| Phase-out begins | $201,750 | $403,500 |
| Deduction fully lost (SSTB) | $276,750 | $553,500 |
Rev. Proc. 2025-32. The phase-out range was widened to $75,000 (single) and $150,000 (joint) starting in 2026.
How it works
From census to a written comparison
Read the guide
Structures, 2026 limits, credits and what data we'll need.
Send the census
Birth dates, hire dates, pay and ownership. No Social Security numbers.
We model options
Owner contributions, staff cost and credit offsets for each structure.
Written comparison
Including keeping your current plan, with setup and annual costs.
Implementation
Optional. A third-party administrator runs the plan; defined benefit designs add an actuary. Separate, disclosed engagements.
How Jorge L. Verar is paid
Plan design analysis, the Form 8881 review and a recommendation to change nothing are free. Jorge L. Verar receives commissions from insurance carriers when life insurance or annuity products are purchased through him, including products used inside or alongside a retirement plan. That conflict of interest is disclosed in writing no later than the time of any recommendation.
If we also keep your books or prepare your taxes
Accounting and tax fees are separate from insurance commissions. We never use your tax return information to discuss insurance or retirement products without your separate written consent (IRC §7216). Plan documents, ERISA and tax questions should also be reviewed with ERISA counsel and, for defined benefit plans, an enrolled actuary.
Free guide
What Your Business Can Do for Your Retirement
Eleven pages covering 2026 limits, six plan structures, the four Form 8881 credits, the new Roth catch-up rule and a census checklist.
Rather talk it through? Call (713) 570-6295