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What are the tax benefits of a cash balance plan?

Cash balance plans have become increasingly popular, especially among small business owners and high-income earners.

What about some strategies?

Like most defined benefit plans offered by employers, cash balance plans are considered tax deferred retirement vehicles. Plan contributions are taxed when withdrawn.The problem with most other defined benefit plans such as a 401(k) plan are the contribution limits.

Are cash balance plan contributions tax deductible?

Yes. Cash balance plans are considered a type of IRS qualified plan. As such, any contributions to IRS approved plans qualify as tax-deductible business expenses. Like any qualified plan, assets are normally offered creditor protection.Here are the deduction strategies:Front loading a plan can help you accelerate the tax deduction.

What are the tax deduction deadlines?

There are a few deadlines of the cash balance plan you will want to keep in mind. Contributions must be made by the tax return due date. But if an extension is filed it is due by the extended due date of the return.The required minimum funding contribution must be made at least within 8 ½ months following the plan year end.