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M OST EMPLOYEES ARE aware how a 401k plan works. Eligible participants have the ability to reroute part of their salary to a retirement account on a pre-tax basis. The deferral takes place until retirement age when money is then withdrawn. When the money is withdrawn, the distribu- tions are taxed at that point at the then current rate. A popular option included in many 401k plans is the Roth 401k. Serious consideration should be given to utilizing this option. The two major differences when comparing the Roth 401k to the standard 401k plan are: 1) contributions to a Roth are not made on a pre-tax basis and 2) the withdrawals are not taxable under current law. As physicians go to retire they are finding themselves in just as high of a tax bracket Innovative Solutions for Your Health Care Business Akron n Cleveland n Lorain County n www.brouse.com Collective Experience. Collaborative Culture. Creative Solutions. With a keen understanding of the operations, market trends and economics of the health care industry, Brouse is poised to proactively counsel and advise a wide array of health care clients, including: ■ n Multi - & Single - Physician Groups ■ n Hospitals & Health Systems ■ n Ancillary Service Providers ■ n Long Term Care Facilities ■ n Home Health Care Providers ■ n Medical Device Companies ■ n Mental Health Service Providers ■ n Durable Medical Equipment & Supply Companies For more information, please contact: Daniel Glessner, Esq., Practice Chair 330.535.5711 x316 dglessner@brouse.com Christopher Huryn, Esq., Partner 330.535.5711 x389 churyn@brouse.com David Schweighoefer, Esq., Partner 216.830.6830 x277 dschweighoefer@brouse.com J. Ryan Williams, Esq., Partner 216.830.6830 x592 rwilliams@brouse.com as when they worked and the expected benefit of the tax deferred retirement accounts never materializes. The overall limit on all 401k contributions for 2015 for someone less than 50 years of age is $18,000 per year. This annual limit can be contributed 100 percent to a regular 401k, all in a Roth 401k or some split between the two — as long as the combined limit doesn't exceed $18,000. If your employer provides a matching contribution, the match must all be contributed to the regular 401k account — even if all employee contributions are going into the Roth. Another benefit is that Roth accounts are not subject to Required Minimum Distribution requirements, which make them more user friendly when it comes to estate planning. There is some thinking that Congress will figure out a way to include Roth distributions in the definition of taxable income but until that happens the Roth 401k should be utilized to the extent possible. Rich Weidrick is a CPA and a Principal of Weidrick Livesay & Company in Akron OH. ■ THE ROTH 401K by Richard Weidrick, CPA +++++++++++++++++++++++++ + + + + +++++++++++++++++++++++++ BUSINESS SECTION 2 0 1 5 M A R C H /A P R I L ■ M D N E W S . CO M ■ MD NEWS Cleveland/Akron/Canton | 2 1