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Retirement Benefits |
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Captive Insurance Retirement BenefitsCaptive Insurance Companies can provide substantial Retirement Benefits for their owners! Captive Insurance Companies that meet the requirements of IRC section 831(b) can receive up to $1.2 million in premiums each year Tax Free. The insurance profits a section 831(b) Captive earns are only taxed when they are actually distributed to its shareholders as Qualified Dividends, or as Long Term Capital Gains in the case of a stock repurchase or a partial or complete liquidation of the Captive. The qualified dividends a Captive Insurance Company pays to its shareholders would be taxed for federal tax purposes at the 15% "qualified dividends" tax rate vs. the much higher federal tax rate on ordinary income of 35%. The "tax deferral" feature of Captives can provide substantial Tax Planning options and advantages especially as the US Congress changes the tax rate on ordinary income, dividends, and long term capital gains in the years to come. Since a Captive's owners control the timing and amount of distributions they receive from their Captive, they can choose to receive these distributions in the manner and time which provides them with the greatest tax benefits. Business owners find the "tax deferral" flexibility a captive provides very appealing since virtually all of their current income from salary, bonuses, partnerships, sub-S corporations, etc, is taxed immediately as it is earned at the highest federal and state tax rates. The "tax deferral" flexibility which a Captive provides can also produce significant Retirement benefits. Most people retire in a State which is different from the one they lived in during their productive earning years. There are several States in the US which have no State income tax including Florida, Nevada, Texas, Washington, South Dakota, Wyoming, and Alaska. By choosing a retirement state that has no state income taxes, or has a lower state income tax rate than their current state of residence, a Captive owner can eliminate or radically reduce state taxes on dividends or long term capital gains distributions they receive from their Captive. Captive Insurance Retirement Benefits, Captive Insurance Retirement Advantages, Captive Insurance Companies and Retirement, Captive Retirement Benefits, Retirement Benefits of a Captive Insurance Company, Using a Captive Insurance Company for Retirement Benefits, Retirement Benefits and Captive Insurance |
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