317-398-9753
[email protected]
Your Business. Your Family. Our Priority.
A company owners’ potential for personal financial security usually depends on the success of the business. Our commitment and responsibility is to help keep your business running smoothly and to help achieve your personal financial goals. Whether you are a business or an individual, our specialized staff will provide you with assistance in all your tax, reporting, financial and business affairs.
We're proud members of:
Brammer & Yeend is an independently owned and operated member firm of CPA Connect, a companion association to CPAmerica International
Financial information and reporting should not be a diversion for business owners, instead, financial information should be accurate, available, and insightful. We leverage experience and technology to provide business owners with dynamic resources and management tools.
Our personal services are designed to help busy, successful families manage their finances and grow their wealth with confidence and peace of mind. We do this by working together with our business solutions, allowing us to partner with clients and coordinate business and personal planning in order to meet their most important goals.
We strive to provide excellent service and solutions that fit our client’s specific needs and are industry appropriate. Our experienced CPAs have worked with clients in a variety of industries and understand the intricacies of each and apply the best solution possible. Over the years we have serviced clients in industries including agribusiness, retail, construction, manufacturing, food & beverage and many more. Below are some of our industries where we have specialized experience and expertise.
Social Security has a money problem that lawmakers can no longer ignore. According to current projections, Social Security’s trust funds are expected to run out of reserves within the next decade. That doesn’t mean Social Security is going bankrupt, but if nothing changes, benefits could be cut across the board.
The good news is that lawmakers are beginning to put forward solutions. The bad news is that none of them are painless. Here are three policy recommendations lawmakers are talking about.
One proposal comes from Senator Bill Cassidy, R-La.
Under Cassidy’s plan, the federal government would borrow 1.5 trillion and invest the money in a separate fund modeled after retirement savings plans such as 401(k)s. The fund would not be part of Social Security’s existing trust funds. Instead, it would be held in escrow for 75 years. Over time, the investment returns would build up a reserve that could offset future shortfalls and help pay scheduled Social Security benefits.
Supporters of this plan back the long-term investment growth approach. They say the math works if markets perform as expected. Critics, however, worry about the risks of tying Social Security’s future to market performance and adding $1.5 trillion to the national debt upfront.
In 2026, Social Security payroll taxes only apply to wages up to $184,500. Earnings above that are untaxed.
Enter Senator Sheldon Whitehouse, D-R.I.
His Medicare and Social Security Fair Share Act would apply Social Security taxes to earnings above $400,000. It would also apply the tax to investment income. And it would close a loophole that lets some wealthy owners of pass-through businesses avoid paying Medicare taxes.
Supporters of this bill say higher earners should shoulder more of the burden because income inequality has increased over time.
Critics argue that it could discourage investment and entrepreneurship while shifting more of the burden to successful business owners and professionals.
Some policymakers are focusing on benefits rather than taxes.
The Committee for a Responsible Federal Budget has proposed limiting Social Security benefits for high earners who consistently hit the taxable maximum earnings during their working years. Rather than increasing payroll taxes, the plan would cap annual Social Security benefits at $100,000 for married couples and $50,000 for individuals.
The plan is based on the idea that Social Security was designed as a safety net, not a retirement windfall for the wealthy.
Supporters of this plan say that targeting benefits for those with the greatest financial need could help preserve the program’s long-term stability.
Critics argue that workers who paid more into the system throughout their careers should receive the benefits they earned.
At this point, nothing is finalized. Lawmakers could choose one of these proposals, combine several approaches, or pursue an entirely different solution. But it seems increasingly likely that Congress will pass some combination of tax increases and benefit adjustments.
For workers, the best move is to keep building retirement savings outside of Social Security. For retirees, stay informed and let your representatives know where you stand.
For many Americans, retirement isn’t a sudden transition but a gradual one. Many Americans leave their full-time careers to take part-time jobs, freelance, consult in their fields, or pursue new opportunities that generate income. But if you’re also drawing Social Security at the same time, the federal government has rules about how much you can earn before your benefits take a hit.
If you’re collecting Social Security while still working, it’s important to understand how your earnings can affect your benefits.
Social Security allows you to work while receiving benefits. However, there are limits if you claim benefits before reaching your full retirement age (FRA).
This changes from year to year, but in 2026, individuals who are younger than full retirement age for the entire year can earn up to $24,480 without affecting their benefits. Once earnings exceed that amount, Social Security withholds $1 for every $2 earned above the limit.
The threshold is higher in the year you reach your full retirement age. If you hit full retirement age by December 31, 2026, you can earn up to $65,160 before any reduction kicks in. Beyond that threshold, Social Security withholds $1 in benefits for every $3 earned above the limit.
Once you actually reach full retirement age, the earnings limit goes away. You can earn as much as you want, and your monthly benefit won’t be touched.
Also note that any withheld benefits aren’t permanently lost. The Social Security Administration (SSA) recalculates your payment at full retirement age to account for the months when benefits were withheld, and your monthly check gets adjusted upward.
If you’re still working and don’t need Social Security income right away, think about holding off on claiming.
Benefits grow approximately 6-8% for each year you delay past 62. Delaying also means sidestepping the earnings limit entirely.
Many people spend decades saving for retirement but don’t fully consider how Social Security fits into their overall financial picture. The earlier you understand your options, the more flexibility you’ll have when deciding when to retire and when to claim benefits.
Here are a few planning tips that can make a real difference:
Retirement looks different for everyone, but if you plan to work while receiving Social Security, make sure you understand the earnings limits that apply before FRA.
Saving for the future has felt like an uphill battle for many Americans lately. Inflation is still up, gas prices aren’t budging, and many workers are cutting back on 401(k) contributions just to put more money in their pockets. But for roughly 56 million Americans, the problem isn’t just adjusting how much to save with each paycheck. It’s that they don’t have a retirement plan at work to begin with.
This “coverage gap” mostly affects small-business employees, part-time workers, and self-employed individuals. For these workers, there’s no easy set-it-and-forget-it way to save for retirement through a paycheck.
President Trump recently introduced a proposal to change this, and it could be pivotal for anyone who’s been left out of the traditional retirement savings system.
In a move that appears to be following through on a plan mentioned in his February State of the Union address, President Trump signed an executive order to launch a new website called TrumpIRA.gov. The site, which is scheduled to go live next year, is designed to be a one-stop shop for workers without access to a 401(k).
The idea behind TrumpIRA.gov is to give private-sector workers access to the same type of retirement accounts that federal workers use through the Thrift Savings Plan. The Thrift Savings Plan features low-cost, high-quality retirement accounts, so to keep in line with this, the government is setting strict rules for the companies listed on TrumpIRA.gov:
This removes two of the biggest hurdles for new savers: high fees that stall growth and the “minimums” that often discourage people with modest incomes from even starting.
One of the most compelling parts of the new plan is the Federal Saver’s Match. Starting next year, the government will actually help savers build their balance by matching what they put in.
Those who earn less than $35,500 (or $71,000 for married couples) can get an extra 50% match on what they save. If someone puts in $2,000 a year, the government will add another $1,000 ($2,000 for married couples). This is basically a federal version of the popular “employer match” that people with workplace 401(k)s can access.
A recent study by Northwestern Mutual revealed that the “magic number” Americans think they need to retire comfortably has jumped to $1.46 million. This is a $200,000 increase from just last year.
The Northwestern Mutual study also revealed that nearly half of Americans don’t think they’ll be financially ready to retire, and roughly 48% are worried they might outlive their savings.
This new proposal aims to bridge the gap. Lowering the fees and providing a direct match make it easier for millions of people to start small and actually see their money grow. For those without a workplace retirement plan, it’s a significant step toward financial security.
According to the 2026 Planning and Progress Study by Northwestern Mutual, the average American now believes they’ll need $1.46 million to retire comfortably. That’s a $200,000 jump from last year. For many Americans, this upward trend is unsettling.
But Americans aren’t without options, or even hope. The study showed some encouraging signs, too. We go through it all below and discuss what Americans can do to catch up.
We’ve heard a lot of talk about the high prices of eggs, but persistent inflation hasn’t just hit our grocery bills. It raised the cost of retirement. Healthcare, housing, and everyday costs are all more expensive. Add in the uncertainty surrounding the future of Social Security and Medicare programs, and it makes sense that people feel like they’re going to need more of a cushion in retirement.
High-interest credit card debt is a current problem across every generation, and nearly all Americans carry some form of debt. Whether it’s mortgages, car loans, student debt, or credit cards, it’s all competing with retirement savings goals.
Gen-X is carrying the heaviest burden right now. In 2025, Gen-Xers held $6.69 trillion in total debt. And though they’re the generation closest to retirement, they’re the least likely generation to have a solid plan for funding their retirement years. But in a show of optimism, 47% of Gen-Xers believe that Social Security will still be available when they retire.
Millennials, on the other hand, are leaning into the importance of retirement planning more than any other generation. And they generally feel confident they’ll be able to retire comfortably when the time comes.
Despite high debt, financial confidence appears to be improving. The same Northwestern Mutual study found that 50% of Americans now feel financially secure, up from 44% last year. And while 53% of respondents still worry their savings won’t be enough to last in retirement, it’s an improvement from 64% in 2025.
People are still worried, but progress is progress, even if it’s slow.
Here’s a trend worth watching. Retirement no longer necessarily means leaving the workforce completely. According to an AARP Foresight 50+ Survey from February, between 6% and 7% of retirees returned to work within the past six months. And 48% of them said financial necessity was the main reason.
AARP expects this trend to continue as long as living costs stay high. For the foreseeable future, retirement may be more of a transition than a finish line.
Navigating a path from here depends partly on where you’re at in life.
For younger workers, time is on your side, so start saving now. Save early and save often, even if it’s a small amount. Thanks to compound growth, a little saved in your 20s will be worth more than a lot saved in your 50s.
Fidelity recommends saving 10 times your annual income by the age of 67. To help get there, it’s commonly recommended to save around 15% of income each year, adjusting that figure for individual goals and circumstances.
If you’re older and need to catch up, you still have options:
Unless you come into a windfall, retirement savings is most likely to improve through small choices repeated over time. Every dollar you save matters. Start today and keep moving in the right direction.
As a small business owner, you don’t have a built-in employer-matching plan to lean on for retirement planning. But you do have control over building wealth over time, and small business owners have access to some of the best retirement tools available. The key is knowing which tools to use. Here’s what to know.
A traditional 401(k) is still one of the most effective and versatile ways to save. Small business owners can contribute to a traditional 401(k) as both the employer and the employee, which means a higher savings potential. And contributions are pre-tax, which lowers your current taxable income. This is a definite win for small business owners, but it comes with a tradeoff: more administration as annual filings, nondiscrimination testing, and oversight all come into play.
With a Roth 401(k), you contribute after-tax dollars, so there’s no immediate tax break, but your withdrawals in retirement are tax-free. This approach could be a good fit if you expect your tax rate to be higher later. It’s not uncommon for business owners to use both a traditional and Roth 401(k). By using this diversification strategy, you can protect yourself from uncertainty around future tax rates.
The Simplified Employee Pension (SEP) IRA is easy to set up and maintain, which makes it popular among small business owners and self-employed individuals. You can contribute a percentage of your income each year. Contributions are tax-deductible, and there’s very little administrative paperwork.
Keep in mind that you generally need to contribute the same percentage for your employees as you do for yourself. That could get expensive as your team grows.
If you’re self-employed with no employees (other than a spouse), a Solo 401(k) offers a lot of flexibility. You can contribute as both employee and employer, which often means higher total contributions than SEP-IRA plans. Establishing a Solo 401(k) is typically more involved than a SEP-IRA, but the flexibility and higher limits make it worth it for many business owners.
You aren’t limited to just one approach. Many business owners layer strategies to boost their tax benefits and retirement security. It’s a smart idea to work with a tax professional to understand how different plans work together to maximize contributions while staying within IRS rules and addressing long-term retirement goals.
Retirement plans come with rules. Contribution limits, deadlines, deduction rules, and reporting requirements can be complex and ever-changing. This is why it helps to work with a qualified professional who understands the needs of small businesses. They can help you choose the right plan, avoid mistakes, and adjust as your business evolves.
As lawmakers look to the 2026 midterm elections, tax relief is back in the conversation. Two new proposals aim to lower taxes for low- and middle-income households by reducing how much income is taxed in the first place. Both plans have different approaches, but they both want to shift more of the tax burden onto high earners. Read on for an overview of both plans and who would actually benefit from them.
Senator Cory Booker recently introduced the “Keep Your Pay Act,” which would raise the standard deduction for joint filers from $32,200 to $75,000. Single filers would get a $37,500 deduction, up from $16,100.
That means a large portion of income would be protected from federal taxes. That could significantly lower tax bills for low and middle-income households.
But Booker doesn’t stop there. The “Keep Your Pay Act” includes additional family-focused tax benefits:
To pay for this, Booker proposes increasing taxes on higher-income households. The top federal income tax rates would rise from 35% and 37% brackets to 41% and 43%, respectively. His plan also includes raising the corporate tax rate and increasing the stock buyback excise tax, though details are still limited.
Sen. Chris Van Hollen and Rep. Don Beyer proposed a competing plan called Working Americans’ Tax Cut Act (WATCA). This plan would eliminate income taxes on lower-income workers through an “alternative minimum tax” system.
Under WATCA, single filers would pay no federal income tax on the first $46,000 they earn, while married couples filing jointly would be exempt from federal income tax on the first $92,000. To qualify, taxpayers’ income must be at or below 175% of the exemption. This works out to around $85,000 for individuals and $161,000 for couples.
Eligible taxpayers would calculate their taxes two ways and pay whichever is lower: under the current tax code or a flat 25.5% rate applied only to income above the $46,000 and $92,000 thresholds.
To fund the plan, Van Hollen proposes a tiered surtax on high earners: a 5% surtax on incomes above $1 million (or $1.5 million for joint filers), 10% above $2 million (or $3 million for joint filers), and 12% above $5 million (or $7.5 million for joint filers).
Like Booker’s plan, the goal here is to shift the tax burden to high earners while easing pressure on low- and middle-income earners.
Both plans aim to help working households, but the impact wouldn’t be the same for everyone. Some experts argue that middle- and upper-middle-income households would actually see the biggest savings. These taxpayers have enough taxable income to benefit from larger deductions or exemptions, whereas lower-income households often have little federal income tax liability to begin with.
For now, these tax plans are just proposals, and they would need broad political support to move forward. But ahead of the 2026 midterm elections, both proposals signal the direction Democrats want to take on tax policy.
Keeping an open line of communication is important to us. We invite you to reach out to us either by phone, email, or this form to ask questions, request an appointment or talk about any finance-related matter that comes to your mind.
317-398-9753
8 Public Square
Shelbyville, IN, 46176
Your Business. Your Family. Our Priority.
A company owners’ potential for personal financial security usually depends on the success of the business. Our commitment and responsibility is to help keep your business running smoothly and to help achieve your personal financial goals. Whether you are a business or an individual, our specialized staff will provide you with assistance in all your tax, reporting, financial and business affairs.
We're proud members of:
Brammer & Yeend is an independently owned and operated member firm of CPA Connect, a companion association to CPAmerica International
Financial information and reporting should not be a diversion for business owners, instead, financial information should be accurate, available, and insightful. We leverage experience and technology to provide business owners with dynamic resources and management tools.
Our personal services are designed to help busy, successful families manage their finances and grow their wealth with confidence and peace of mind. We do this by working together with our business solutions, allowing us to partner with clients and coordinate business and personal planning in order to meet their most important goals.
We strive to provide excellent service and solutions that fit our client’s specific needs and are industry appropriate. Our experienced CPAs have worked with clients in a variety of industries and understand the intricacies of each and apply the best solution possible. Over the years we have serviced clients in industries including agribusiness, retail, construction, manufacturing, food & beverage and many more. Below are some of our industries where we have specialized experience and expertise.
Social Security has a money problem that lawmakers can no longer ignore. According to current projections, Social Security’s trust funds are expected to run out of reserves within the next decade. That doesn’t mean Social Security is going bankrupt, but if nothing changes, benefits could be cut across the board.
The good news is that lawmakers are beginning to put forward solutions. The bad news is that none of them are painless. Here are three policy recommendations lawmakers are talking about.
One proposal comes from Senator Bill Cassidy, R-La.
Under Cassidy’s plan, the federal government would borrow 1.5 trillion and invest the money in a separate fund modeled after retirement savings plans such as 401(k)s. The fund would not be part of Social Security’s existing trust funds. Instead, it would be held in escrow for 75 years. Over time, the investment returns would build up a reserve that could offset future shortfalls and help pay scheduled Social Security benefits.
Supporters of this plan back the long-term investment growth approach. They say the math works if markets perform as expected. Critics, however, worry about the risks of tying Social Security’s future to market performance and adding $1.5 trillion to the national debt upfront.
In 2026, Social Security payroll taxes only apply to wages up to $184,500. Earnings above that are untaxed.
Enter Senator Sheldon Whitehouse, D-R.I.
His Medicare and Social Security Fair Share Act would apply Social Security taxes to earnings above $400,000. It would also apply the tax to investment income. And it would close a loophole that lets some wealthy owners of pass-through businesses avoid paying Medicare taxes.
Supporters of this bill say higher earners should shoulder more of the burden because income inequality has increased over time.
Critics argue that it could discourage investment and entrepreneurship while shifting more of the burden to successful business owners and professionals.
Some policymakers are focusing on benefits rather than taxes.
The Committee for a Responsible Federal Budget has proposed limiting Social Security benefits for high earners who consistently hit the taxable maximum earnings during their working years. Rather than increasing payroll taxes, the plan would cap annual Social Security benefits at $100,000 for married couples and $50,000 for individuals.
The plan is based on the idea that Social Security was designed as a safety net, not a retirement windfall for the wealthy.
Supporters of this plan say that targeting benefits for those with the greatest financial need could help preserve the program’s long-term stability.
Critics argue that workers who paid more into the system throughout their careers should receive the benefits they earned.
At this point, nothing is finalized. Lawmakers could choose one of these proposals, combine several approaches, or pursue an entirely different solution. But it seems increasingly likely that Congress will pass some combination of tax increases and benefit adjustments.
For workers, the best move is to keep building retirement savings outside of Social Security. For retirees, stay informed and let your representatives know where you stand.
For many Americans, retirement isn’t a sudden transition but a gradual one. Many Americans leave their full-time careers to take part-time jobs, freelance, consult in their fields, or pursue new opportunities that generate income. But if you’re also drawing Social Security at the same time, the federal government has rules about how much you can earn before your benefits take a hit.
If you’re collecting Social Security while still working, it’s important to understand how your earnings can affect your benefits.
Social Security allows you to work while receiving benefits. However, there are limits if you claim benefits before reaching your full retirement age (FRA).
This changes from year to year, but in 2026, individuals who are younger than full retirement age for the entire year can earn up to $24,480 without affecting their benefits. Once earnings exceed that amount, Social Security withholds $1 for every $2 earned above the limit.
The threshold is higher in the year you reach your full retirement age. If you hit full retirement age by December 31, 2026, you can earn up to $65,160 before any reduction kicks in. Beyond that threshold, Social Security withholds $1 in benefits for every $3 earned above the limit.
Once you actually reach full retirement age, the earnings limit goes away. You can earn as much as you want, and your monthly benefit won’t be touched.
Also note that any withheld benefits aren’t permanently lost. The Social Security Administration (SSA) recalculates your payment at full retirement age to account for the months when benefits were withheld, and your monthly check gets adjusted upward.
If you’re still working and don’t need Social Security income right away, think about holding off on claiming.
Benefits grow approximately 6-8% for each year you delay past 62. Delaying also means sidestepping the earnings limit entirely.
Many people spend decades saving for retirement but don’t fully consider how Social Security fits into their overall financial picture. The earlier you understand your options, the more flexibility you’ll have when deciding when to retire and when to claim benefits.
Here are a few planning tips that can make a real difference:
Retirement looks different for everyone, but if you plan to work while receiving Social Security, make sure you understand the earnings limits that apply before FRA.
Saving for the future has felt like an uphill battle for many Americans lately. Inflation is still up, gas prices aren’t budging, and many workers are cutting back on 401(k) contributions just to put more money in their pockets. But for roughly 56 million Americans, the problem isn’t just adjusting how much to save with each paycheck. It’s that they don’t have a retirement plan at work to begin with.
This “coverage gap” mostly affects small-business employees, part-time workers, and self-employed individuals. For these workers, there’s no easy set-it-and-forget-it way to save for retirement through a paycheck.
President Trump recently introduced a proposal to change this, and it could be pivotal for anyone who’s been left out of the traditional retirement savings system.
In a move that appears to be following through on a plan mentioned in his February State of the Union address, President Trump signed an executive order to launch a new website called TrumpIRA.gov. The site, which is scheduled to go live next year, is designed to be a one-stop shop for workers without access to a 401(k).
The idea behind TrumpIRA.gov is to give private-sector workers access to the same type of retirement accounts that federal workers use through the Thrift Savings Plan. The Thrift Savings Plan features low-cost, high-quality retirement accounts, so to keep in line with this, the government is setting strict rules for the companies listed on TrumpIRA.gov:
This removes two of the biggest hurdles for new savers: high fees that stall growth and the “minimums” that often discourage people with modest incomes from even starting.
One of the most compelling parts of the new plan is the Federal Saver’s Match. Starting next year, the government will actually help savers build their balance by matching what they put in.
Those who earn less than $35,500 (or $71,000 for married couples) can get an extra 50% match on what they save. If someone puts in $2,000 a year, the government will add another $1,000 ($2,000 for married couples). This is basically a federal version of the popular “employer match” that people with workplace 401(k)s can access.
A recent study by Northwestern Mutual revealed that the “magic number” Americans think they need to retire comfortably has jumped to $1.46 million. This is a $200,000 increase from just last year.
The Northwestern Mutual study also revealed that nearly half of Americans don’t think they’ll be financially ready to retire, and roughly 48% are worried they might outlive their savings.
This new proposal aims to bridge the gap. Lowering the fees and providing a direct match make it easier for millions of people to start small and actually see their money grow. For those without a workplace retirement plan, it’s a significant step toward financial security.
According to the 2026 Planning and Progress Study by Northwestern Mutual, the average American now believes they’ll need $1.46 million to retire comfortably. That’s a $200,000 jump from last year. For many Americans, this upward trend is unsettling.
But Americans aren’t without options, or even hope. The study showed some encouraging signs, too. We go through it all below and discuss what Americans can do to catch up.
We’ve heard a lot of talk about the high prices of eggs, but persistent inflation hasn’t just hit our grocery bills. It raised the cost of retirement. Healthcare, housing, and everyday costs are all more expensive. Add in the uncertainty surrounding the future of Social Security and Medicare programs, and it makes sense that people feel like they’re going to need more of a cushion in retirement.
High-interest credit card debt is a current problem across every generation, and nearly all Americans carry some form of debt. Whether it’s mortgages, car loans, student debt, or credit cards, it’s all competing with retirement savings goals.
Gen-X is carrying the heaviest burden right now. In 2025, Gen-Xers held $6.69 trillion in total debt. And though they’re the generation closest to retirement, they’re the least likely generation to have a solid plan for funding their retirement years. But in a show of optimism, 47% of Gen-Xers believe that Social Security will still be available when they retire.
Millennials, on the other hand, are leaning into the importance of retirement planning more than any other generation. And they generally feel confident they’ll be able to retire comfortably when the time comes.
Despite high debt, financial confidence appears to be improving. The same Northwestern Mutual study found that 50% of Americans now feel financially secure, up from 44% last year. And while 53% of respondents still worry their savings won’t be enough to last in retirement, it’s an improvement from 64% in 2025.
People are still worried, but progress is progress, even if it’s slow.
Here’s a trend worth watching. Retirement no longer necessarily means leaving the workforce completely. According to an AARP Foresight 50+ Survey from February, between 6% and 7% of retirees returned to work within the past six months. And 48% of them said financial necessity was the main reason.
AARP expects this trend to continue as long as living costs stay high. For the foreseeable future, retirement may be more of a transition than a finish line.
Navigating a path from here depends partly on where you’re at in life.
For younger workers, time is on your side, so start saving now. Save early and save often, even if it’s a small amount. Thanks to compound growth, a little saved in your 20s will be worth more than a lot saved in your 50s.
Fidelity recommends saving 10 times your annual income by the age of 67. To help get there, it’s commonly recommended to save around 15% of income each year, adjusting that figure for individual goals and circumstances.
If you’re older and need to catch up, you still have options:
Unless you come into a windfall, retirement savings is most likely to improve through small choices repeated over time. Every dollar you save matters. Start today and keep moving in the right direction.
As a small business owner, you don’t have a built-in employer-matching plan to lean on for retirement planning. But you do have control over building wealth over time, and small business owners have access to some of the best retirement tools available. The key is knowing which tools to use. Here’s what to know.
A traditional 401(k) is still one of the most effective and versatile ways to save. Small business owners can contribute to a traditional 401(k) as both the employer and the employee, which means a higher savings potential. And contributions are pre-tax, which lowers your current taxable income. This is a definite win for small business owners, but it comes with a tradeoff: more administration as annual filings, nondiscrimination testing, and oversight all come into play.
With a Roth 401(k), you contribute after-tax dollars, so there’s no immediate tax break, but your withdrawals in retirement are tax-free. This approach could be a good fit if you expect your tax rate to be higher later. It’s not uncommon for business owners to use both a traditional and Roth 401(k). By using this diversification strategy, you can protect yourself from uncertainty around future tax rates.
The Simplified Employee Pension (SEP) IRA is easy to set up and maintain, which makes it popular among small business owners and self-employed individuals. You can contribute a percentage of your income each year. Contributions are tax-deductible, and there’s very little administrative paperwork.
Keep in mind that you generally need to contribute the same percentage for your employees as you do for yourself. That could get expensive as your team grows.
If you’re self-employed with no employees (other than a spouse), a Solo 401(k) offers a lot of flexibility. You can contribute as both employee and employer, which often means higher total contributions than SEP-IRA plans. Establishing a Solo 401(k) is typically more involved than a SEP-IRA, but the flexibility and higher limits make it worth it for many business owners.
You aren’t limited to just one approach. Many business owners layer strategies to boost their tax benefits and retirement security. It’s a smart idea to work with a tax professional to understand how different plans work together to maximize contributions while staying within IRS rules and addressing long-term retirement goals.
Retirement plans come with rules. Contribution limits, deadlines, deduction rules, and reporting requirements can be complex and ever-changing. This is why it helps to work with a qualified professional who understands the needs of small businesses. They can help you choose the right plan, avoid mistakes, and adjust as your business evolves.
As lawmakers look to the 2026 midterm elections, tax relief is back in the conversation. Two new proposals aim to lower taxes for low- and middle-income households by reducing how much income is taxed in the first place. Both plans have different approaches, but they both want to shift more of the tax burden onto high earners. Read on for an overview of both plans and who would actually benefit from them.
Senator Cory Booker recently introduced the “Keep Your Pay Act,” which would raise the standard deduction for joint filers from $32,200 to $75,000. Single filers would get a $37,500 deduction, up from $16,100.
That means a large portion of income would be protected from federal taxes. That could significantly lower tax bills for low and middle-income households.
But Booker doesn’t stop there. The “Keep Your Pay Act” includes additional family-focused tax benefits:
To pay for this, Booker proposes increasing taxes on higher-income households. The top federal income tax rates would rise from 35% and 37% brackets to 41% and 43%, respectively. His plan also includes raising the corporate tax rate and increasing the stock buyback excise tax, though details are still limited.
Sen. Chris Van Hollen and Rep. Don Beyer proposed a competing plan called Working Americans’ Tax Cut Act (WATCA). This plan would eliminate income taxes on lower-income workers through an “alternative minimum tax” system.
Under WATCA, single filers would pay no federal income tax on the first $46,000 they earn, while married couples filing jointly would be exempt from federal income tax on the first $92,000. To qualify, taxpayers’ income must be at or below 175% of the exemption. This works out to around $85,000 for individuals and $161,000 for couples.
Eligible taxpayers would calculate their taxes two ways and pay whichever is lower: under the current tax code or a flat 25.5% rate applied only to income above the $46,000 and $92,000 thresholds.
To fund the plan, Van Hollen proposes a tiered surtax on high earners: a 5% surtax on incomes above $1 million (or $1.5 million for joint filers), 10% above $2 million (or $3 million for joint filers), and 12% above $5 million (or $7.5 million for joint filers).
Like Booker’s plan, the goal here is to shift the tax burden to high earners while easing pressure on low- and middle-income earners.
Both plans aim to help working households, but the impact wouldn’t be the same for everyone. Some experts argue that middle- and upper-middle-income households would actually see the biggest savings. These taxpayers have enough taxable income to benefit from larger deductions or exemptions, whereas lower-income households often have little federal income tax liability to begin with.
For now, these tax plans are just proposals, and they would need broad political support to move forward. But ahead of the 2026 midterm elections, both proposals signal the direction Democrats want to take on tax policy.
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