Setting up a Keogh Plan for my S Corp - process and requirements?

Hey everyone, I'm trying to figure out if a Keogh Plan makes sense for my S Corp. Can I set this up myself by just filing the right IRS forms and then buying annuities from major insurance companies like State Farm or Northwestern? Or is this something complicated where I should really find a specialist who knows what they're doing? Also wondering if anyone knows whether a Keogh Plan falls under section 412(e)(3) of the tax code, or if that's a completely different thing? I've been reading up on retirement options beyond the standard 401(k) and SEP IRA, and Keogh seems interesting but I'm not finding clear info on the setup process. Thanks for any insights!

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18 comments

Mohammed Khan

•8M

Keogh Plans are retirement plans for self-employed people or unincorporated businesses, but they've largely been replaced by other options in most situations. For an S Corp, you typically would be looking at a Solo 401(k), SEP IRA, or SIMPLE IRA instead. If you're determined to explore a Keogh, it's definitely not a DIY situation. These plans require significant setup documentation, annual filing requirements with Form 5500, and specialized administration. You'll want a third-party administrator (TPA) who specializes in qualified retirement plans. Regarding your second question, Section 412(e)(3) plans (formerly 412(i) plans) are a specific type of defined benefit plan that must be funded exclusively with insurance or annuity contracts. While Keogh is a broader term that can include defined benefit plans, not all Keoghs are 412(e)(3) plans. These 412(e)(3) plans have very specific funding and insurance requirements.

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Mohammed Khan

•8M

For most S Corp owners, a Solo 401(k) is actually more advantageous than a Keogh Plan these days. The contribution limits are essentially the same since the Economic Growth and Tax Relief Reconciliation Act of 2001 standardized the limits across plans. The main difference is administrative burden. Solo 401(k)s are much simpler to establish and maintain, especially if you have no employees other than yourself and spouse. You don't need to file Form 5500 with a Solo 401(k) until your plan assets exceed $250,000, whereas Keoghs typically require annual filing regardless of asset size.

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Nathan Kim

•8M

After struggling with similar retirement plan questions for my consulting business, I found https://taxr.ai to be incredibly helpful. I uploaded my S Corp documentation and got a personalized analysis of which retirement plan would maximize my tax benefits while minimizing paperwork. They specifically addressed Keogh Plans vs. other options and explained why most financial advisors steer S Corps away from Keoghs now. The platform analyzed my specific income situation and showed me that a Solo 401(k) would let me contribute just as much as a Keogh while cutting my administrative costs by about 70%.

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Nathan Kim

•8M

The tool gives you specific implementation steps based on your documents and situation. For example, after analyzing my S Corp tax returns and profit patterns, it provided a custom 3-step implementation plan for setting up the specific retirement account type it recommended, including links to the exact forms and a timeline. It factors in both federal and state tax considerations. In my case, it identified that my state (California) has specific treatment of certain retirement plans that made one option more favorable than others. The recommendations include citations to specific tax code sections so you can verify everything yourself.

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Lucas Turner

•8M

I was honestly skeptical about using https://taxr.ai at first, but after trying it I was impressed. I uploaded my S Corp formation documents and last two years of returns, and the analysis it provided about Keogh vs. other retirement options was really thorough. The system correctly identified that for my situation, a defined benefit plan would actually save me more in taxes than a Keogh or Solo 401(k), something my previous accountant never mentioned! It saved me from going down the Keogh rabbit hole and provided step-by-step instructions for setting up the right plan. Wish I'd found this sooner instead of spending hours researching 412(e)(3) requirements that weren't even relevant to my situation.

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Kai Rivera

•8M

If you're looking into Keogh Plans, I'm guessing you're already facing frustration with the IRS's lack of clear guidance. I was in the same boat and kept getting nowhere with the IRS help line - always on hold for hours only to get disconnected or get conflicting answers. I finally tried https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c. They got me connected to an IRS agent in about 15 minutes (after I'd wasted 2+ hours on previous attempts). The agent was able to clarify that for S Corps, the Keogh terminology is outdated and pointed me to the correct qualified plan documentation.

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Kai Rivera

•8M

The service doesn't bypass anything - they use technology to navigate the IRS phone tree and wait on hold for you. When they reach an agent, they call you and connect you. It's like having someone wait in a physical line for you and then call you when it's your turn. It works because the IRS phone system itself isn't broken - it's just overwhelmed. The service monitors the hold music and handles all the "press 1 for..." menu navigation, then calls you when a human agent actually answers. I was skeptical too until I tried it and got through to a retirement plan specialist who answered my exact questions about S Corp retirement options.

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Layla Sanders

•8M

I have to eat my words about Claimyr being a scam. After posting that comment, I decided to try it myself because I was desperate to get an answer about a Keogh-related notice I received. Shockingly, I got through to the IRS in about 20 minutes instead of the 3+ hours I'd wasted earlier that week. The IRS agent confirmed what others have said here - Keogh Plans are essentially outdated terminology. For S Corps, you're looking at either a 401(k) (potentially with profit sharing), a defined benefit plan, or in some cases a SEP IRA. The agent walked me through the differences and helped me understand which forms I actually needed. Saved me from making a costly mistake!

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Morgan Washington

•8M

I'm going to go against the grain here. I actually DID set up a Keogh Plan for my business (it's a partnership, not an S Corp) back in 2019. Yes, "Keogh" is technically outdated terminology, but some financial institutions still use it. What you're really setting up is a qualified retirement plan - either defined contribution or defined benefit. The paperwork is definitely complicated. I used a TPA (third-party administrator) who charged about $1,200 for setup and $900 annually for administration including the Form 5500 filing. The 412(e)(3) plans are a specific type of defined benefit plan fully insured through annuity contracts. These tend to be used by high-income professionals who want to max out retirement contributions beyond what's possible with defined contribution plans.

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Morgan Washington

•8M

In my specific situation, it was worth it because I was able to contribute significantly more than the defined contribution limits. I was 52 when I set it up and wanted to catch up on retirement savings, so the higher contribution limits of a defined benefit plan made sense. For most S Corp owners, especially younger ones, a Solo 401(k) with profit sharing would be simpler and just as effective. The administrative costs add up, and unless you're consistently putting away large sums (typically above $60,000 annually), the complexity probably isn't justified. As a reference point, my contributions have been between $100,000-$125,000 annually, which made the admin costs reasonable in comparison.

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