Profit Sharing Plans

Why Provide a Profit Sharing Plan?

• Tax-Deductible Contributions

  All contributions to a Profit Sharing Plan (up to the allowable limit) are deductible for federal and, in most cases, state income tax purposes. This favorable tax treatment may provide a reduction in your company’s current taxes. If you are self-employed, contributions are deductible on your personal tax return.

• Tax-Deferred Growth

  All contributions to your Profit Sharing Plan account compound tax-deferred until withdrawn at retirement. Your investment can accumulate more quickly than in a non tax-deferred investment vehicle.

• Generous Contribution Limits

  You may be able to contribute as much as 25% or up to $50,000 in 2012, whichever is less, to a Profit Sharing Plan account.

• An Attractive Employee Benefit

  Small business owners may set up a Profit Sharing Plan as a way to compete with larger businesses for quality employees. This popular and highly visible employee benefit can help you attract and retain the employees you need to succeed in today's competitive business environment. Unlike large company plans, a Profit Sharing Plan is easy to establish and maintain.

Frequently Asked Questions

Can we answer your question here? ------------------------------------ Who is considered an "eligible" employee? Who is required to make contributions each year? What is considered “compensation”? Can I set up a vesting schedule? When are contributions to the plan due? What is the deadline for establishing a plan? Can employees take money out of the plan at any time? When must participants begin taking distributions? Are employer contributions reported as taxable income? What are the responsibilities of the plan administrator?

For more information on establishing a Profit Sharing Plan, visit wellsfargo.com.

Any tax or legal information in this website is merely a summary of our understanding and interpretations of some of the current income tax regulations and is not exhaustive. Investors should consult their tax advisor or legal counsel for advice and information concerning their particular situation. Wells Fargo Funds Management, LLC, Wells Fargo Funds Distributor, LLC, nor any of their representatives may give legal or tax advice.