Investing in Retirement Plans to Save on Taxes for Your Business: A Smart Move for Murrieta, Temecula, Wildomar & Menifee Business Owners

Stephanie Peterson
3 days ago
2 min read

As a small business owner, finding smart ways to reduce your tax burden while planning for the future is essential. One powerful strategy that often gets overlooked is investing in retirement plans—not just for your own retirement, but also as a valuable financial and tax-saving tool for your business. At Superior Virtual Bookkeeping LLC, we help local business owners in Murrieta, Temecula, Wildomar, Menifee, and the surrounding areas make informed decisions about retirement planning and tax strategy.

Why Retirement Plans Matter for Your Business

Whether you’re a solopreneur, contractor, or managing a small team, retirement plans offer dual benefits:

Tax deductions today
Wealth accumulation for tomorrow

Setting up the right retirement plan can help you:

Reduce taxable income
Save for your future
Attract and retain talent if you have employees
Stay compliant with IRS regulations

2025 Retirement Plan Contribution Limits

Understanding the latest contribution limits is crucial for maximizing your retirement savings and tax benefits. Here are the updated limits for 2025:

1. SEP IRA (Simplified Employee Pension)

Great for solo business owners and those with few or no employees.

Contribution Limit: Up to 25% of compensation, capped at $70,000 for 2025.
Note: For self-employed individuals, contributions are generally limited to 20% of net earnings from self-employment.

2. Solo 401(k)

Ideal for business owners with no employees (other than a spouse).

Employee Contribution Limit: Up to $23,500.
Catch-Up Contribution: Additional $7,500 if you're age 50 or older.
Total Contribution Limit: Combined employee and employer contributions up to $70,000.
Super Catch-Up: For ages 60–63, an increased catch-up contribution of $11,250 is available.

3. SIMPLE IRA

Best for businesses with up to 100 employees.

Employee Contribution Limit: Up to $16,500.
Catch-Up Contribution: Additional $3,500 if you're age 50 or older.
Super Catch-Up: For ages 60–63, an increased catch-up contribution of $5,250 is available.

How These Plans Help You Save on Taxes

Every dollar you contribute to these plans (within IRS limits) reduces your taxable income. For example, if you earn $100,000 and contribute $20,000 to a SEP IRA, you’re only taxed on $80,000. That’s real savings—and those savings can be significant for business owners in high-income brackets.

Additionally, employer contributions to employee retirement accounts are deductible as a business expense, helping you keep more of your hard-earned money.

Local Guidance for Retirement and Tax Planning

At Superior Virtual Bookkeeping LLC, we specialize in helping service-based businesses and professionals—including attorneys, real estate agents, contractors, and creatives—navigate their bookkeeping and tax strategies with clarity and confidence.

Located in Murrieta, we proudly serve clients in Temecula, Wildomar, Menifee, and throughout Riverside County with personalized virtual accounting services.

Ready to Start Saving?

Investing in a retirement plan isn’t just a smart financial move—it’s a tax strategy that pays off. Let’s talk about which plan makes the most sense for your situation and how it can lower your tax bill.

📞 Contact Superior Virtual Bookkeeping LLC today to schedule a free consultation. We’ll help you set up your books, optimize your deductions, and keep your business finances running smoothly.

Superior Virtual Bookkeeping LLCYour local virtual bookkeeping expert for Murrieta, Temecula, Wildomar, Menifee, and surrounding areas.