Maximize Your Deductions with Instant Solo Cash Balance and Instant Solo(k) combination
Want a bigger tax deduction? Are you able to commit to large funding amount for at least 5 years? If your compensation is large enough, combining a 401(k) plan with a Cash Balance Pension Plan can help you save more. Here is what you could deduct:
Age Minimum Compensation Estimated Cash Balance Deduction 401(k) Deferral Estimated Profit Sharing Deduction Total Deduction
| Age | Minimum Compensation | Estimated Cash Balance Deduction | 401(k) Deferral | Estimated Profit Sharing Deduction | Total Deduction |
| 40 | 110,000 | 110,00 | 23,500 | 6,600 | 140,100 |
| 45 | 145,000 | 145,000 | 23,500 | 8,700 | 177,200 |
| 50 | 190,000 | 190,000 | 23,500 | 11,400 | 224,900 |
| 55 | 250,000 | 250,000 | 31,000 | 15,000 | 296,000 |
| 60 | 280,000 | 280,000 | 31,000 | 16,800 | 327,800 |
| 65 | 310,00 | 310,000 | 31,000 | 18,600 | 359,600 |
Next Steps
· Confirm Your Compensation: Ensure your compensation is sufficient. W-2 income is preferred. If using Schedule C or K-1 or not sure you have enough compensation, share a draft with your Nova Sales Representative.
· Your Cash Balance deduction is your compensation ( This amount is reduced for younger ages. As an example, a 40 year old with $300,000 compensation would have a deduction limited to approximately $110,000). Example: you are age 47 with $135,000 in compensation. Your deduction is $135,000. Age 60 with $200,000 in compensation. Your deduction is $200,000.
· Tailored Solutions: Need different deductions? Contact your Nova Sales Representative for a customized plan.
· Please note that pension plan commitments are not discretionary. Please confirm with your CPA that you can commit to these large funding amounts for at least 5 years.
· 2024 Retroactive adopters. The deadline is August 1, 2025. Call your Nova Sales Representative regarding retroactive adoption.
*Actual deductions depend on factors such as compensation, IRS interest rates, date of birth, date of hire, and other unique circumstances. Consult with your CPA or Nova Sales Representive for a funding illustration based on your precise data. We DO NOT recommend a cash balance plan for a brand new company. In addition to the above deduction, you can defer and additional $23,500 to $31,000 into the 401(K) component of your Solo(k). The above numbers are based on the 2025 tax year. IRS provides small cost of living increases each year.