Congress should consolidate and simplify the types of tax-favored retirement plans now available to small business owners to minimize the cost and administrative burden imposed by the plans, the American Institute of CPAs told Congress.
In written testimony submitted for the record of the House Small Business Committee’s Oct. 2 hearing on retirement savings for small employers, AICPA Tax Executive Committee chairman Jeffrey A. Porter suggested several ways simplify the complexity of the retirement planning universe. “When a small business grows and begins to explore options for establishing a retirement plan, the alternatives, and the various rules, can become overwhelming,” he wrote in his testimony. “There are too many options that businesses need to consider before deciding which plan is appropriate for them. Some plans are only available to employers with a certain number of employees, whereas other plans require mandatory contributions or create significant administrative burdens. Such administrative burdens include annual return filings, discrimination testing, and an extensive list of notice requirements with associated penalties for failures and delays in distributing such notices to employees.
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