each individual’s highest mar- ginal tax rate (versus the current 15 percent). Even the new healthcare bill has provisions that allow for a new Medicare tax of 3. 8 percent on investment income starting in 2013. relief for any size office PHO TODISC
The great 401(k) tax hedge:
AS BUSINESS OWNERS manage through
the tough economy, a new challenge is waiting just around the corner: the potential for
higher taxes in 2011. To soften the impact of
this anticipated hit, many businesses are proactively turning to 401(k) plans that can help
them hold on to more of their income.
“Thanks to our relationship with
ShareBuilder 401(k), Costco members who
own a business have access to low-cost 401(k)
plans designed to help any size office receive
tax and saving benefits,” says Jim Goforth,
insurance and investing services manager of
New taxes expected in 2011
A business owner, or anyone, for that
matter, who falls into the 33 or 35 percent tax
brackets may experience increased tax rates
next year to 36 or 39. 6 percent respectively,
explains Jim. Additionally, long-term capital-gains tax rates for high earners are also scheduled to shift from 15 to 20 percent, with
dividends to be taxed as ordinary income at
How 401(k)s can provide relief
“401(k) plans offer employees and owners
two great ways to protect more money from
taxes,” says Stuart Robertson, general manager
of ShareBuilder 401(k). “The first way is contributing pretax, which helps you save on taxes
in the current year, and the second is after-tax
savings in a Roth 401(k), which helps hedge
against future tax increases.”
401(k)s help participants to lower their
current-year taxes through personal contribu-
tions of up to $16,500 pretax and $22,000 for
those older than 50 years of age. This money is
not taxed until it is withdrawn in retirement.
By adding an optional company match and/or
profit sharing, employees have the ability to
put and receive up to $49,000 a
year—or $54,500 if they are older than
“For those who expect to increase their
income over time or are concerned about
future tax increases, the Roth 401(k) option
can make a lot of sense,” says Jim. “By paying
taxes upfront on Roth 401(k) contributions,
these savings are never taxed again as long as
monies are not accessed until [the fund’s
owner] is at least 59½ years of age.”
For more information, go to Costco.com
and type in “401(k)” in the search box, or call
1-800-239-2152.—T. Foster Jones
50—into their accounts. Savings in this
range can trigger the added benefit of lowering one’s tax bracket.
Triple Strength Formula
Nature Made TripleFlex® original formula works naturally to
maintain long-term joint health.
Nature Made TripleFlex® naturally replenishes key nutrients
needed for long-term continuation of your joint health with:
We’re bringing our best and trusted joint-health formula back to Costco Members!
Glucosamine 1500 mg;– Naturally provides joint mobility,
elasticity and ;exibility†.
Chondroitin 800 mg – Nourishes joint lubrication and
cushioning with a natural solution†.
MSM 750 mg – A source of dietary sulfur, which plays a
role in the elasticity and ;exibility of the connective tissues†.
†These statements have not been evaluated by the Food and Drug Administration.
These products are not intended to diagnose, treat, cure or prevent any disease.
56 ;e Costco Connection AUGUST 2010