In the US, you employ 50% of private sector employees and pay 43% of total private payroll. You produce 97% of all exported goods, create $7.8 trillion annual revenue in the US, and generate 65% of net new jobs! Yes, small business owner and entrepreneur, you drive the American economy, provide jobs, and create wealth!

Through your passion, commitment, and personal sacrifices, you have achieved so much and navigated so much adversity – all this while taking care of your customers, employees, family, and community. Here’s a question for you: have you been taking care of yourself and your future?

With so much time and energy focused on building your business, it is often difficult to find the time to tend to your own financial future. As seasons and cycles change, so does your cashflow. How do you ensure you are setting aside enough money every year to fund your financial goals and give you the ability to someday retire? How do you invest this money and take full advantage of tax deductions offered to you by the IRS? Getting started is simple. Here are a few tips.

Start now. The beauty about compound interest is that the sooner you start, the more time your money has to work for you and grow.

Maximize your IRA contributions. An IRA is an Individual Retirement Arrangement. The 2015 contribution limits are $5,500 ($6,500 if you are 50 or older). There are two basic kinds of IRA’s: Roth and traditional. Traditional IRA contributions are tax-deductible as long as your modified adjusted gross income does not exceed IRS limits (check IRS.gov for 2015 limits). Your money grows tax-deferred, and you only pay taxes when you take the money out. With a Roth IRA, your contributions are taxed that year, so you do not receive a deduction. However, the money grows tax-free, and you do not pay any taxes when you take the money out. You may contribute to one or both types of IRA’s up to the yearly limit (one limit for the total of all your contributions).

Why are these instruments useful? Remember, with a traditional IRA, you invest tax-free dollars now, let the money grow tax-deferred, and pay taxes later on what you take out. With a Roth, you pay taxes up front, but the money grows tax-free until you take it out later. Generally, you cannot access IRA funds without tax and penalty until age 591/2. They are truly meant for you to plan and fund your retirement years.

Look into a SEP. As a business owner, you also have access to a Self-Employed Pension (SEP). A SEP plan allows employers to contribute to traditional IRAs (SEP-IRAs) set up for employees including you. Contribution limits are the lessor of 25% of employee income or $53,000. The best part is that you can contribute to both a SEP-IRA and your Roth/traditional IRA up to their respective limits. The IRS requires that employers contribute the same % of employee income to all eligible employees. The dollar amount does not have to be the same, but the % does. This plan works especially well for self-employed entrepreneurs. As is the case with the traditional IRAs, all of the money you contribute towards the SEP-IRA is tax-deductible that year, grows tax-deferred, and is taxed when pulled out later.

Here’s a secret. You can contribute to any of the three investment vehicles up to April 15th when federal taxes are due. That means you can decide up until April 15th 2016 to make a contribution to your 2015 tax year. Remember, the sooner you start, the better off you will be.

Take time today to invest in your financial future. You owe it to yourself.

*Sources:

http://emoneyadvisor.com/emacorp/external/sources/pdf/Financial_EDU _ThePowerOfTheEntrepreneur_Video_Sources.pdf