Create and manage your small business retirement plan

A profit-sharing plan may be a good choice for a business owner who has variable profits but wants to reward long-term employees by giving them a percentage of the company's profits. This type of plan offers the employer flexibility in determining annual contribution amounts. The employer decides how much he or she wants to contribute each year and can even skip years if necessary.

• Flexible, tax-deferred investment choices
• Tax-deductible employer contributions
• Simplified recordkeeping
• Optional loan provision for employees

Companies of any size and varying income can offer this plan.

Profit-sharing plans must be established by the end of the employer's tax year and funded by the employer's tax return due date, plus extension. Contributions can vary by year.

Employee contributions are not eligible for this plan.

2010: Maximum of 25% of compensation up to $49,000 in employee and employer contributions ($54,500 for individuals age 50 and over).