Posted by admin on Sep 26, 2014 in Blog | 0 comments
SEP General Simplified Employee Pension (SEP) plans can provide a significant source of income at retirement by allowing Business owners (sole proprietor, owners of S Corp, C Corp, Partnership, LLC) to set aside money in retirement accounts for themselves and their employees. A SEP does not have the start-up and operating costs of a conventional retirement plan. A SEP does not have the start-up and operating costs of a conventional retirement plan and allows for a contribution of up to lesser of a) $51,000 (for 2013, $52,000 for 2014), or b) 25 percent of each employee’s pay. Available to any size business Easily established by adopting Form 5305-SEP, a SEP prototype or an individually designed plan document No filing requirement for the employer Only the employer contributes -To traditional IRAs (SEP-IRAs) set up for each eligible employee -Employee is always 100% vested in (or, has ownership of) all SEP-IRA money Pros: Easy to set up and operate Low administrative costs Flexible annual contributions – good plan if cash flow is an issue Employer contributions only An employer generally has no filing requirements. Cons: Employer must contribute equally for all eligible employees Participant Loans: Not permitted. The assets may not be used as collateral. In-Service Withdrawals: Yes, but includible in income and subject to a 10% additional tax if under age 59 1/2. When to set up plan: Any time up to the due date of employer’s return (including extensions) Last day for Contribution: Due date of employer’s return (including...
read more
