What should I ask my CPA?

A defined benefit plan needs an actuary, a plan document and a funding commitment every year, which is work outside preparing a tax return, so many CPAs leave it to specialists. A CPA who has not raised it may not see it as tax work. The useful step is to raise it yourself, with a short list of questions.

A defined benefit plan defers tax. Contributions are deducted now. Earnings inside the plan are not taxed while they stay in the plan. Every dollar paid out is ordinary income to the person who receives it, and a distribution before age 59½ carries a 10 percent additional tax unless an exception applies.

How the deduction turns into a tax figure: How much tax will I save?

Ask your CPA what your federal and state tax rates are now and are likely to be later, whether your W-2 pay is reasonable and high enough to support the contribution, how the deduction changes your qualified business income deduction, whether you own related businesses, and what profit looks like for the next several years.

• What is my top federal rate, and my state rate, now and in retirement? For 2026 the top federal rate of 37 percent starts above taxable income of $640,600 for a single filer and $768,700 for a married couple filing jointly.
• Is my W-2 pay reasonable for my work, and high enough to carry the contribution I want? A plan counts no more than $360,000 of anyone’s pay for 2026.
• How does the deduction change my qualified business income deduction? For 2026 that deduction’s limits begin to phase in above taxable income of $201,750 for a single filer and $403,500 for a joint return.
• Do I, my spouse or my family own other businesses that count with mine?
• Where does the deduction go for my type of business, and which deadline does my return use?
• Will you work with the actuary each year on my pay and the contribution?

Expect your CPA to ask for the census, the plans the business already has and what it put into them, your type of business, your pay for the year, any other businesses you or your family own, and whether you expect to sell or close the business. A CPA who asks these questions is checking fit, not stalling.

Bring the two deadlines as well, because the CPA will want both.

Two deadlines apply. The minimum required contribution is due eight and a half months after the plan year ends: September 15, 2027 for a calendar 2026 plan year, whether or not your tax return is extended. The deduction is allowed for a contribution paid by your return's due date including extensions: September 15, 2027 for an extended S corporation or partnership, October 15, 2027 for an extended sole proprietor or C corporation. A contribution paid after the funding date but before the deduction date can still be deducted and still owe the excise tax.

Both dates, by type of business: When is the deadline to start?

Ask for an illustration from an enrolled actuary that prints its assumptions. Then set the staff cost and the yearly fees against the tax saved on the deduction above your 401(k), and test whether profit can carry the minimum for years. Ask the CPA, too, whether anyone pays the CPA in connection with the plan.

The CPA’s own professional code governs that payment. The AICPA Code of Professional Conduct limits when a CPA in public practice may take a commission for recommending a product, including a bar while the CPA’s firm audits or reviews the client’s financial statements. A CPA who may take a permitted commission “shall disclose that fact to any person or entity to whom the member recommends or refers a product or service to which the commission relates,” and the Code says those disclosures should be made in writing. State boards of accountancy set their own rules as well.

The IRS lists the defined benefit plan as the most costly and the most administratively complex type of plan, so the illustration should show every yearly cost beside the deduction.

The risks to weigh: What are the risks?

Yes, in a small way. Each year the CPA supplies pay figures to the actuary, confirms that the contribution fits the return, puts the deduction in the right place for your type of business, and watches the deposit date. The actuary and the administrator do the plan work, and the CPA keeps the return and the plan in step.

A C corporation deducts the contribution on its corporate return (Form 1120). An S corporation deducts it on Form 1120-S. A partnership reports it on Form 1065 and passes each partner’s own contribution through on Schedule K-1 (box 13, code R) for the partner to deduct personally. A sole proprietor deducts the owner’s own contribution as an adjustment to income under section 62(a)(6) and the employee share as a business expense.

For the CPA: What does a CPA file and check?

The steps to start: How do I start a plan?

A first read on fit: Does my business qualify?