Profit Sharing Plan
  Available to — Employers with one or more employees that want to offer a tax-deferred savings plan to employees and want flexibility to change contributions each year.
  How it Works — Employer contributes an amount, which may vary each year, to each Eligible Employee's account. Contributions are discretionary and may be based on company profits.

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  FAQ
  Main Features — Plan design determined by employer. Generally, eligibility criteria include attainment of age 21 and 1 year of service. If the plan permits early withdrawals, a penalty of 10% on money withdrawn before age 59 ½ generally applies; for non-5% owners, required minimum distributions begin by the later of age 70 ½ or retirement. Investments and participation qualifications determined by employer with certain guidelines. IRS Form 5500 generally filed annually. Plan must pass non-discrimination tests each year. Employer contributions can be made up until Employer’s tax filing deadline (including extensions).
  Annual Contributions — Employer contributions to all employee accounts - up to 25% of earned income. Maximum combined contributions (employee and employer to all defined contribution plans) for each employee’s account is the lesser of 100% of compensation or $40,000 (as indexed).
  Advantages:
  Valuable employee benefit
  Contributions and certain plan expenses may be tax deductible to employer (up to legal limits).
  Contributions are discretionary
  Flexibility in plan design
  Loans may be allowed
  Account balance and any earnings grow tax-deferred until withdrawn.