Retirement Plan Options for Small Businesses: A Strategic Guide for High-Income Professionals and Entrepreneurs in Austin, Cedar Park, and Beyond

By Lakeline Tax & Bookkeeping Services
Led by Lakshmi Ramkumar — Over 20 Years of Expertise Serving High-Income Earners and Business Owners

Table of Contents

1. Introduction: Why Proactive Tax Planning Is a Game-Changer

2. The Pain Points High-Income Professionals Face in Texas

3. Understanding Retirement Plans: Foundation Before Strategy

4. Traditional IRA and Roth IRA: Core Building Blocks

5. SEP-IRA: A Scalable Option for Small Businesses

6. SIMPLE IRA: Smart Plans for Growing Businesses

7. 401(k) Family: Traditional, Safe Harbor, and Solo

8. Defined Benefit Plans: Accelerating Retirement Wealth

9. Advanced Wealth Strategies: Real Estate, Equity, and Trust Planning

10. IRS Resolution and Audit Defense for Retirement Plans

11. Case Studies: How Lakeline Clients Saved Thousands

12. Checklists, Worksheets, and IRS Reference Charts

13. Future-Proofing: IRS Trends and 2025 TCJA Sunset Planning

14. Mindset Shift: From DIY Tax Prep to Expert Planning

15. Conclusion & Call to Action

1. Introduction: Why Proactive Tax Planning Is a Game-Changer

High-income earners and business owners in Texas often underestimate the power of tax-optimized retirement planning. With incomes above $200K and businesses generating $500K+, tax liabilities can easily consume a disproportionate share of earnings. Proactive planning—rather than reactive filing—transforms retirement planning into a strategic wealth-building tool. At Lakeline Tax, we help you not only reduce today’s tax burden but also secure your long-term financial independence, while staying IRS-compliant.

2. The Pain Points High-Income Professionals Face in Texas

• High Federal Liabilities: With no state income tax in Texas, federal taxes become the biggest threat to your wealth.

• IRS Scrutiny: High earners are more likely to be audited; incomplete documentation or aggressive deductions can trigger issues.

• Missed Deductions: Many self-employed professionals overlook eligible deductions like home offices, vehicles, and hiring family.

• Complex Structures: Entrepreneurs juggling LLCs, S-corps, and real estate investments face pitfalls without expert guidance.

✅ Lakeline Tax reviews consistently highlight how our proactive approach has helped physicians, executives, and real estate investors save tens of thousands annually.

3. Understanding Retirement Plans: Foundation Before Strategy

Retirement plans are not just savings vehicles—they are tax reduction tools. According to IRS Publication 560, contributions to qualified plans are deductible, reducing taxable income while allowing deferred or tax-free growth. For business owners, choosing the right plan can mean the difference between a five-figure and six-figure retirement nest egg.

4. Traditional IRA and Roth IRA: Core Building Blocks

• Traditional IRA: Pre-tax contributions, deductible within IRS limits, with taxable withdrawals in retirement.

• Roth IRA: After-tax contributions, tax-free withdrawals, subject to income eligibility limits.

For high-income earners in Austin and Cedar Park, backdoor Roth IRAs may unlock additional tax-free growth, but require precise execution to avoid IRS penalties.

5. SEP-IRA: A Scalable Option for Small Businesses

The SEP-IRA is ideal for high-income professionals with few or no employees. Contributions of up to 25% of net earnings (capped by IRS annual limits) allow aggressive retirement funding while minimizing current taxable income.
⚠️ Pitfall: Contributions must be proportional across all employees. Many Lakeline Tax clients nearly overfunded staff plans before our advisors realigned their strategy.

6. SIMPLE IRA: Smart Plans for Growing Businesses

For businesses under 100 employees, SIMPLE IRAs allow either 2% automatic contributions or up to 3% matches. While contribution limits are lower than 401(k)s, the administrative ease makes them attractive for scaling companies in the Austin tech and healthcare sectors.

7. 401(k) Family: Traditional, Safe Harbor, and Solo

• Traditional 401(k): Highest contribution limits; combines employee deferrals with employer matches.

• Safe Harbor 401(k): Removes IRS nondiscrimination testing, crucial for businesses with varied income levels.

• Solo 401(k): Perfect for consultants, physicians, or real estate professionals with no staff; allows both employer and employee contributions.

Real estate investors in Cedar Park have used Solo 401(k)s to shelter significant rental income profits while building retirement security.

8. Defined Benefit Plans: Accelerating Retirement Wealth

Defined benefit plans allow contributions exceeding $200K annually depending on age and income. They are ideal for physicians and executives nearing retirement who want to “catch up” quickly. While complex and requiring actuaries, Lakeline Tax has implemented these plans successfully for medical practices and law firms in Austin, leading to six-figure tax savings annually.

9. Advanced Wealth Strategies: Real Estate, Equity, and Trust Planning

Beyond retirement accounts, high earners can leverage:

• Real estate depreciation and cost segregation for massive deductions.

• Equity comp strategies (stock options and RSUs) to minimize AMT and optimize cash flow.

• Trusts and estate planning to secure wealth transfer while reducing estate tax risk.

10. IRS Resolution and Audit Defense for Retirement Plans

High earners are prime IRS targets. At Lakeline Tax, we provide audit defense, penalty abatement, and compliance reviews. If the IRS questions your retirement deductions, we ensure documentation, logs, and calculations stand IRS scrutiny.

11. Case Studies: How Lakeline Clients Saved Thousands

• Physician in Austin: Reduced liability by $78K annually through a defined benefit plan.

• Tech executive in Cedar Park: Used a backdoor Roth strategy and Solo 401(k) to shelter stock option gains.

• Real estate investor: Combined cost segregation with SEP-IRA contributions, saving $52K in federal taxes.

12. Checklists, Worksheets, and IRS Reference Charts

Includes:

• IRS contribution limits (2025 update)

• Retirement plan comparison chart

• Audit-proofing documentation checklist

• Future-proofing calendar for tax deadlines

13. Future-Proofing: IRS Trends and 2025 TCJA Sunset Planning

With TCJA provisions set to expire in 2025, deductions and tax brackets will shift significantly. Lakeline Tax continuously monitors IRS updates, preparing clients to adjust contributions, Roth conversions, and entity structures in advance.

14. Mindset Shift: From DIY Tax Prep to Expert Planning

DIY tax prep software cannot account for the complexities of high-income planning. Lakeline Tax clients frequently share in reviews how moving from national chains to our local, expert-led firm transformed their tax outcomes.

15. Conclusion & Call to Action

Your retirement and tax planning strategy should go beyond compliance—it should empower your financial independence.
📞 Call Lakeline Tax today at (512) 368‑7589 or book a secure virtual consultation via www.lakelinetax.com.

✅ Take action now—avoid missed deductions, prevent costly IRS mistakes, and secure the retirement you’ve worked hard to build.

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