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# Profit Sharing Plans

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Profit-sharing plans offer you flexibility, along with various contribution options designed to reward long-term employees with the potential for tax-deferred growth — including an optional loan provision.

It offers flexibility in determining annual contribution amounts. You decide how much you want to contribute each year. You can even skip years if you need to.

Here are some other details:

## Eligibility to Contribute

Companies of any size and structure can offer this plan. Employee eligibility requirements are set when the plan is established.

## Maximum Annual Contribution

Employer: Up to the lesser of 25% of compensation or $70,000 in 2025. Profit sharing plans allow you a great deal of flexibility to vary the contribution rate each year.

## Tax-Deductible Contributions

Employers can deduct contributions from federal taxable income.

## Taxation of Earnings and Withdrawals

Contributions and earnings are taxed as ordinary income when withdrawn.

## Types of Investments

Stocks, bonds, mutual funds and Advisory Products available through a WF Advisors brokerage account.

## Withdrawal Penalties

10% IRS additional tax if withdrawn before age 59½ unless exception applies.

Exceptions:

- Separation of service in year turning age 55 or older
- Death
- Disability
- Substantially equal periodic payments over life expectancy
- Qualified military reservist
- Up to $5,000 for qualified adoption / birth expenses

## Required Withdrawals

The age to start Required Minimum Distributions (RMDs) begins at age 73 (Does not affect participants who turned 72 on or before 12/31/2022.) If you are still employed by the employer sponsoring this plan, RMDs may be delayed until the year of retirement (some exceptions apply).

## Deadline to Set Up and Fund

- Profit sharing plans may be set up by tax filing deadlines plus extensions.
- Contributions may be made up through the business tax filing date (plus extensions)

## Commissions and Fees

Vary by account and investments

## Interested in learning more about our retirement plans for small

businesses? Call us at 1-877-493-4727

## Make your money work

Earn more with a Business Market Rate Savings account (Member FDIC)

Learn More

Investment and Insurance Products are:

- Not Insured by the FDIC or Any Federal Government Agency
- Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any Bank Affiliate
- Subject to Investment Risks, Including Possible Loss of the Principal Amount Invested

Investment products and services are offered through WF Advisors, a trade name used by WF Clearing Services, LLC and WF Advisors Financial Network, LLC, separate registered broker-dealers and non-bank affiliates of WF & Company.

WF and Company and its Affiliates do not provide tax or legal advice. This communication cannot be relied upon to avoid tax penalties. Please consult your tax and legal advisors to determine how this information may apply to your own situation. Whether any planned tax result is realized by you depends on the specific facts of your own situation at the time your tax return is filed.

Information published by WF Bank, N.A., WF Advisors, or one of its affiliates as part of this website is published in the United States and is intended only for persons in the United States.

PM-08072026-7617442.1.1

LRC-0225

## Compare our plans

Get a side-by-side comparison of our business retirement plans.

## More resources

- Expand Employee Benefits

## Still have questions?

### Call Us

WF Advisors

Brokerage Accounts

1-877-493-4727

More contact options