What you need to save
4. Paying the IRS, not yourself
Small business owners have a lot to worry about, and retirement usually gets bumped from the list in favor of more near-term concerns. But there are some serious tax breaks to be had if you set aside some money for retirement now, breaks that will reduce the money you owe the IRS, and boost what you pay yourself.
If you're self-employed, you may contribute up to 25 percent of your self-employment income (gross income minus expenses) to a SEP (Simplified Employee Pension) and deduct the full amount. You can also set up SEPs for your employees and make tax-deductible contributions to them.
Another option, though less flexible, is the SIMPLE 401(k). If you have 100 or fewer employees and they each earn at least $5,000 a year, you and your employees can contribute up to $10,000 a year pre-tax and your company must match the contributions.
(Here's a more detailed look at small-business retirement plan options.)