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April 15 is approaching, and many small-business owners are thinking about their personal and business tax bills. In California’s Orange County, where I advise clients, many have found a way to shelter part of their income in tax-deferred Solo 401(k) plans.

These self-directed, IRS-approved plans are retirement accounts designed specifically for self-employed individuals and small-business owners without any full-time employees. Since they are designed for individuals, Solo 401(k) plans are cost-effective and easy to manage. Custodial fees are reduced because the plan owner can act as the trustee rather than having to pay an outside administrator.

The self-directed feature also gives plan owners the ability to decide on the investment options they know best instead of having to choose among limited options.

“Hundreds of our clients utilize their self-directed retirement accounts to purchase income-generating real estate,” says Scott Pastel, partner of Marshall Reddick Real Estate, a Newport Beach-based real estate investing and education firm. “Many folks today are looking for an alternative investment that is not tied to the volatility of the stock market. This opportunity allows them to have more control of their retirement account and even provides tax-sheltering benefits from the income that investment properties produce.”

Solo 401(k) plans offer many tax benefits to business owners, including:

High contribution limits. A Solo 401(k) plan participant can contribute, in the form of elective deferral and profit-sharing contributions, up to $53,000 in 2015. Account holders age 50 or older can also make a catch-up contribution of up to $6,000, bringing the total to $59,000 annually. This is nearly ten times the $6,500 limit for traditional and Roth IRAs.

Tax deferral. All contributions to a Solo 401(k) are automatically tax-deferred. This helps business owners lower their tax bills for the year. It also allows them to delay their tax payments until retirement, when they might be in a lower tax bracket.

Cost savings. The cost of setting up and maintaining a Solo 401(k) plan can be claimed as a deductible expense for a business that sponsors the plan. That produces additional savings for small-business owners by reducing their taxable business income.

These plans are especially helpful for the specific financial challenges faced by small-business owners. Independent contractors and owners of businesses without full-time employees, in particular, usually do not have a proper retirement plan. Without access to an employer-sponsored plan, or without any other employees to offer retirement benefits to, people in this group usually rely on Social Security benefits and private savings for their retirement.

This can be a risky move. By not contributing to a retirement plan, small-business owners and independent contractors in Orange Country and elsewhere are missing out on the tax benefits that a qualified plan offers. This means they also face a higher tax bill every tax season, lowering their profit and capital.

When the time comes for retirement, will these owners and contractors gather enough funds to retire, or will they have to rely solely on social benefits?

“Taxes are one of the biggest concerns for small businesses, and having an effective tax plan can reduce your tax liability by thousands of dollars, affecting your return on investment substantially,” says Michael Atias, the director of tax services at OTA Tax Pros in Irvine. “Solo 401(k) is also a great asset protection tool that allows you to protect your money from creditors.”

Small-business owners should take a look at the Solo 401(k) option. Aside from the tax-saving benefits, they might find it a better way to map out a wise financial plan and face their financial future with greater confidence.