Self Directed IRA Store » sep ira

What Is an IRA – What You Must Know

Self Directed IRA Store — Tue, 15 Mar 2011 14:00:33 +0000

What is an IRA? It is a savings account for retirement, sheltering savings, investments and earnings in either a tax-deferred or tax-free manner. It is the actual account the investments are held in. Preparing for retirement anticipates the circumstances that you might encounter . If we could see into our future, it would be simple to be precise in knowing what to do. But we can’t know things like what our lifespan will be, or if our personal life situation will alter drastically . When getting ready for retirement, we need to protect our long-term assets. Saving during our employment years should help us be ready for a stress-free retirement when our Individual Retirement Plans secure that future. In the current economic climate, downsizing could cost some jobs. You could have an injury or disability that could prevent you from continuing to work. The life expectancy age continues to rise for both men and women, so being unprepared could mean you may outlive your savings. Inflation risk can erode financial returns on those savings. Often there are added health problems as we grow older , so there may be more medical expenses to cover . And you may have unanticipated dependents, disabled or unemployed grown children or grandchildren, to help support , even in your retirement years. Life and what’s ahead is full of suprises , so we need to plan and be disciplined about the plan. What is an IRA? It is an account designed to help individuals get ready for retirement. A major aspect of retirement planning is expecting all these financial possibilities , and making appropriate moves now to reach our goals. An Individual Retirement Plan is an excellent tool in your planning . A self-directed Individual Retirement Plan, either a traditional IRA or a Roth IRA, is your investment account to make it happen . Contributing to individual retirement plans in a consistent manner helps you grow your retirement wealth. A self-directed Individual Retirement Plan allows you to diversify investment choices in a safe, growth-oriented manner. Self-directed Individual Retirement Plans give you additional investment options that may be pivotal in reaching your goals. Saving and investing wisely now can bring great security that will make your retirement golden.

Growing Retirement Wealth in an IRA SEP

Self Directed IRA Store — Sat, 05 Mar 2011 15:39:29 +0000

An IRA SEP is the remarkably easy and smart plan designed to benefit self-employed people and small business owners who want to prepare now for their retirement years. Sole proprietorships, partnerships, S and C corporations and LLCs can qualify and can take advantage of the IRA SEP. The plan has a broad appeal since it is inexpensive to set-up and administer, flexible in that it allows rollovers, and has a greater than expected and discretionary contribution policy. An IRA SEP plan could be established by a company owner with employees or by a single-person company . Contributions are paid directly to an individual retirement account set-up for the benefit of the business owner and each eligible employee. An eligible employee must be at least 21 years old, have worked for the company for at minimum three of the last five years, and received $550 in compensation from the employer for the year. Contributions to an IRA SEP are normally 100% tax deductible, and the investment earnings in an IRA SEP grow tax-deferred. Withdrawals , allowed after age 59 ½ years old, are taxed as ordinary income. Any withdrawals before that age may trigger a 10% IRS penalty in addition to the normal income taxes. Withdrawals must start by age 70 ½ years old. The annual contributions an employer can fund on behalf of the employee to the IRA SEP cannot exceed the lesser of 25% of compensation or $49,000. These same contribution caps will apply to the IRA SEP of a self-employed person, and all contributions are made in cash, not stock. The plan isset up by adopting a SEP agreement and qualified employees opening SEP IRAs. A formal written agreement is drawn up and each qualified employee receives a written copy. The IRA SEP can be established at any point during the tax year up until the due date of the employer’s tax return

IRA SEP – Growing Retirement Wealth

Self Directed IRA Store — Fri, 04 Mar 2011 15:37:58 +0000

The IRA SEP can be set-up at any timeduring the tax year up until the due date of the employer’s tax return. The administrative costs are low, and for the self-employed person there are normally no administrative costs at all. One requirement of the IRA SEP is that all employees must receive equal benefits. Most employers decide on a large mutual fund company to handle the employee’s IRA SEP. This allows the employees to make investment choices for their own plans, and frees the employer from having to make those decisions. The plan functions in the same way as a pension plan but on a streamlined scale and with no filing required . The IRA SEP can also be rolled over into other kinds of IRAs if employment changes, so it is very portable. It’s an excellent choice for the small company wanting to offer a pension plan, but lacking the resources to establish a conventional kind of plan. The IRA SEP is easy to understand and simple to manage .It was structured to benefit the self-employed and small company owners, and is also a popular choice for LLCs, partnerships, S and C Corporations, and sole proprietorships. Contribution limits are generous in the IRA SEP, and are generally 100% tax deductible. Investment earnings in the IRA grow tax-deferred. Withdrawals can start as soon as age 59 ½ years old, but earlier withdrawal incurrs a 10% IRS penalty in addition to income taxes on the withdrawal The distributions must begin no later than age 70 ½ years of age. An IRA SEP is a good alternative for owners of a small company who would like to help employees prepare for retirement, but are unable to manage a more conventional retirement plan. Since contributions can be up to 25% of the employee’s compensation, there is the opportunity to rapidly grow a retirement nest egg with the IRA SEP.

SEP Retirement Plan – Are You Ready?

Self Directed IRA Store — Tue, 01 Mar 2011 15:23:24 +0000

The SEP retirement plan is a good option for small businesses and the self-employed, and can provide an excellent source of retirement income. Sole proprietorships, partnerships, S and C corporations and LLCs could all benefit from this plan . Many businesses are eligible for a tax credit of up to $500 per year for each of the first three years covering the expense of starting the plan. The SEP retirement plan is simple to set up , and once in place is simple to operate. Small businesses appreciate the ability to attract a better quality of employee to their job openings by being able to offer the additional incentive of the SEP retirement plan benefits. To be qualified for the SEP retirementplan, the employee needs to be 21 years old, have worked for the employer for three of the last five years and been compensated with at least $550 in wages. Often employers decide on a mutual fund company to administer the account. Each employee can then choose their individual investments from the provided funds, relieving the employer from needing to make those decisions. Contributions are not required, so the employer may decide on the level and frequency of those contributions based on the company’s profitability. Having a SEP retirement plan is a great alternative for smaller companies who might not have the resources to present their employees a more conventional option. The Simplified Employee Pension Plan, or SEP retirement plan makes that available , at a significantly smaller cost and with less reporting rules . There are good benefits for both the employer and the employees. The SEP retirement account allows for much higher contributions, so eligible participants may rapidly build their retirement savings in a tax-sheltered environment. The benefits are fully vested immediately when they are contributed, making the SEP retirement account portable. Workers who change employers are able to roll their Sep balances into another IRA, or may choose to transfer them to another employer’s qualified retirement program

Rapid Contributions with SEP IRA Limits

Self Directed IRA Store — Mon, 21 Feb 2011 15:06:00 +0000

If you are considering a SEP account for your retirement, learn the SEP IRA limits before making your decision. There are contribution and participation limits to consider . SEP IRA limits on participation are set by the Internal Revenue Service . Specifically, a person can not fall under the definition of a “common law” employee as defined by the Internal Revenue Service . A common law employee is a person who performs services for an employer who has the right to control and direct the results of the work and the way it is done. A critical indicator is the employer’s ability to fire the employee. The SEP IRA limits on contributions are easily defined. Contributions are topped out at 25% of compensation. In 2009, the contribution dollar amount was raised from $46,000 to $49,000 yearly . Contributions are not mandatory in every year, and no certain percentage of contributions needs to be maintained. The employer has the flexibility to make choices . The employer could make a full amount contribution one year and a smaller contribution the following year, or nothing at all. No catch-up contributions are permitted for older employees. Based on the 25% rule, the income threshold is $245,000. Over and above that, no additional contributions are allowed for the year. The same caps on contributions made to an employee’s SEP IRA also apply to contributions funded to a self-employed individual’s account, so SEP IRA limits for the self-employed are approximately 25%, and must be made in cash, no stock. The contribution deadline is normally April 15 of the following year, so participants have until that date to contribute for the previous year’s SEP IRA . Self-employed individuals can no longer contribute to their SEP IRA beginning the year they turn 70 ½ years old . To be qualified for a company SEP plan, the person must be at least 21 years old, have worked for the business for three of the past five years, and have received at least $550 in compensation. Persons meeting those criteria are eligible to participate in the plan. TheSEP IRA limits are high , enabling individuals to rapidly accumulate their retirement savings nest egg.

SEP IRA Limits – Rapid Results

Self Directed IRA Store — Sun, 20 Feb 2011 15:44:47 +0000

Check out the SEP IRA limits before deciding if the plan is right for you. SEP IRAs were specially structured to benefit the self-employed and smaller businesses . SEPs do not offer a catch-up contribution for older employees, but a huge benefit of the SEP is that is has an especially high contribution limit. In 2009 and 2010, the SEP IRA limits on contributions for qualified employees are the lower of either $49,000 or 25% of annual employee compensation. These high caps allow for rapid accumulation of retirement funds for the participating eligible employees. The same SEP IRA limits apply to contributions made to a self-employed persons SEP IRA. All contributions to the account must be made in cash, rather than in stock or stock options. There are SEP IRA limits on age as well. An individual must be at least 21 years of age to qualify for an employer’s SEP plan, and self-employed individuals who set up a SEP account on their own behalf may no longer contribute to the plan beginning the year they turn 70 ½ years old. However, IRS rules require small business owners to contribute an equal percentage of each eligible employee’s income to his account, so an employee who is 70 ½ or older and otherwise eligible for the SEP plan gets an employer SEP IRA contribution. Contributions are not required every year. The employer does not need to maintain any specific level of contributions, and has freedom to make a decision every year . The employer can choose the percentage of contribution, and often bases it on net profit and economic conditions that impact the business. For employees that have a SEP IRA account , the money is theirs once the employer makes the contribution. Only the employer makes contributions to the account . Since theSEP IRA limits are so generous , the plan makes it possible for participants to quickly accumulate their retirement nest egg

SEP IRA Limits – Understanding the Facts

Self Directed IRA Store — Sat, 19 Feb 2011 15:42:13 +0000

The SEP IRA is a retirement account designed to benefit small business owners and self-employed people . The account is workable for sole proprietorships, LLCs, partnerships, and S and C corporations. In 2009 and 2010, the SEP IRA limits on contributions are capped at $49,000 yearly or 25% of the employee’s total compensation annually. Contributions to a SEP IRA are normally 100% tax deductible and the investment earnings in the plan grow tax deferred. Withdrawals after age 59 ½ are taxed as ordinary income, but earlier distributions will incur a 10% penalty tax as well as regular income tax. The primary appeal of the SEP account is the generous contribution limit and the great flexibility the SEP provides . Annual contributions are discretionary. The employer can decide each year on the percentage of contribution, or decide to make no contribution at all. Sometimes this decision is made based on the company’s net profit and the current economic situations that impact the company . SEP IRA plans can be established by a business owner with employees or by a one person business. The SEP should be established by tax filing deadline. Self-employed people who have established accounts on their own behalf should be aware of SEP IRA limits on age. They can no longer contribute to their account beginning the year they turn 70 ½ years old. Because the IRS has a regulation of uniform benefits for all, small company owners must contribute an equal percentage of each eligible employee’s income to their plan, so an worker who is 70 ½ or older receives the employer SEP IRA contribution. To be qualified for the plan, the employee must be at least 21 years old. Stock is not an allowable contribution, and all contributions are made in cash. There is no provision in a SEP account for a catch-up contribution for employees older than 50 years old. SEP accounts are inexpensive to establish and administer , and with generous SEP IRA limits on contributions might be an ideal plan for quick retirement savings.

SEP IRA Contribution – Advantage for Investors

Self Directed IRA Store — Fri, 18 Feb 2011 15:40:12 +0000

The SEP IRA contribution cap is generous, and just one of the advantages of this plan that has been specifically structured to favor the self-employed person and smaller businesses . For those lacking the resources to opt for a more conventional retirement plan, the SEP is extremely appealing because of the low management expenses and ease of set-up . For small companies , qualifying employees issimple and straightforward. The employee must be at least 21 years old, have worked for the business for three of the past five years, and received at least $550 in compensation. If you are an employee participating in your employer’s plan, your SEP IRA contribution can be 25% of your salary. The employer will make the determination on the percentage and is not locked in to either percentage or frequency for the SEP IRA contribution. The employer can make a decision annually , or even choose no contribution at all. Many employers will base this contribution decision on the net profit of the company or as a reflection of current economic conditions and their impact on the business. If you are self-employed, you do not have wages. Instead you have net profits from your business venture. Self-employed individuals can make a SEP IRA contribution of 20% of net profits up to $44,000 per year . Net profits for a SEP plan are calculated by taking the net self-employment income and subtracting one-half of the self-employment taxes. The resulting net-net self-employment income is then multiplied by 20% to come to the SEP IRA contribution amount. You have until your final tax filing deadline, including extensions, to contribute to your SEP for the previous year, but you do have to fund your SEP before you file your tax return. The generous limits on aSEP IRA contribution, for both the self-employed and the small business , surely is an advantage to those who need to rapidly save for their retirement security.

What To Expect – the SEP IRA Contribution

Self Directed IRA Store — Thu, 17 Feb 2011 15:38:16 +0000

If you are self-employed, there is a retirement plan developed specifically for you! A SEP IRA allows you to put away a lot of tax-deferred funds toward your retirement. Independent contractors, sole proprietors, S and C corporations, partnerships and LLCs, as well as small businesses can all use the SEP to shelter retirement savings. The SEP IRA contribution for self-employed individuals is 20% of net earnings minus self-employment tax. For small businesses , the SEP IRA contribution cap allows for 25% of the qualified employee’s salary per year , at a maximum of $49,000. An employee is identified as at least 21 years of age, working for the company for three of the past five years, and has been compensated with at least $550. For employees, the SEP IRA contribution must be uniform. So when the employer contributes 20% to one employee’s SEP , he/she must uniformly contribute 20% to the accounts of each eligible employee. Contributions are not locked in , so the employer may decide on the percentage and frequency of contributions. Often this decision is made annually after reviewing the business’s net profits and factoring in economic circumstances that have impacted the company . Because the contribution limit is high, there is an opportunity to swiftly accumulate retirement savings in the tax-deferred SEP environment. This is an especially desirable benefit for those getting a late start onpreparing for retirement who would like an accelerated savings alternative. Employees cannot contribute to their SEP unless they are self-employed. A SEP IRA permits for deferral of asignificant portion of income into retirement investments where the money can grow tax-free. You can make the SEP IRA contribution for the previous yearup until the final tax filing deadline, including extensions. The contributions must be done before filing the tax return. There is no allowance in a SEP account for the catch-up contribution for olderworkers, but with the appealingly higher SEP IRA contribution limit it is possible to save asignificant amount veryquickly as you get ready for retirement.

SEP IRA Contribution – Get Rapid Results

Self Directed IRA Store — Wed, 16 Feb 2011 15:22:23 +0000

A Simplified Employee Pension Plan, generally known as a SEP, is really a particularform of Traditional IRA plan structured to benefit the self-employed individual and small companies. The rules of the SEP plan define how funding takes place and establishes the SEP IRA contribution limit. For the small company, the employer makes the determination on what the compensation will be, between 0% and 25%. The compensation amount is equal for alleligible employees, so a 20% contribution to one employee’s SEP means everyeligible employee must also receive a 20% contribution. SEP IRA regulations allow forgoodflexibility on contributions. The employer can evaluate the business’s net profits or take into account prevailing economiccircumstances prior to deciding on the percentage and frequency of contributions, even having thechoice of skipping years if need be . An employee is defined as 21 years or older, having worked for the employer for three of the past five years, and been paid a minimum of $550 in compensation. If the company is a sole proprietorship, a partnership, or an LLC taxed as a sole proprietorship all deductions have to be recognized and funded by the employee’s tax filing deadline. For S and C corporations, funding mustoccur by the corporate filing deadline. A SEP plan for a small business makes it possible for the employees to make alarger contribution thanks to thelarger SEP IRA contribution limit, and many employees participate since contributions are taken from pre-tax income. The SEP IRA contribution cap is a generous $49,000 or 25% of income, whichever is less. The self-employed do not have traditional wages, butinstead have net profits from the business. Self-employed individuals may contribute 20% or up to $44,000 of net profit to their SEP plan. There are many advantages to the SEP, including low administrationexpenses and uncomplicated set-up, but perhaps the biggest benefit is the chance to accumulate tax-deferred retirement savings rapidly, thanks to the high allowable SEP IRA contribution.

Fast Savings Possible with SEP IRA Maximum Contribution

Self Directed IRA Store — Tue, 15 Feb 2011 15:21:02 +0000

The allowable IRA contribution can be a benefit for those getting ready for retirement for apparent reasons: the more you save now , the more comfortable your retirement will be. That is why the SEP IRA maximum contribution is beneficial . Higher than more conventional plans, the SEP will allow a contribution of 25% of annual compensation , or a maximum of $49,000 annually, if you are an employee participating in an employer’s SEP plan. The employer has the power to set the contribution amount , and may review and modify the percentage of contribution or hold all contributions if business conditions dictate. Sometimes the business will determine the contribution amount after factoring in the company’s net profits for the year. The SEP regulations require that contributions be consistant for all , so a contribution of 20% on behalf of one employee means that all eligible participants in the plan also get a 20% contribution to their accounts. The money is completely vested as soon as it is contributed, and continues to thrive in the tax-advantaged SEP account . Qualified employees will be at least 21 years of age , have worked for the company for three of the last five years, and been paid a minimum of $550. Employee SEP plans are usually held by a mutual fund company , allowing the individual employees to choose their own investments for the plan. SEP IRA maximum contribution limits are high enough to provide for speedy savings, particularlyhelpful to workers who have gotten a late start preparing for retirement and looking to speed up their savings. Self-employed individuals do not have wages , so their contributions limit is calculated on net profit. The SEP IRA maximum contribution for self-employed individuals is 20% of net profits, or a maximum of $44,000. You can contribute to your SEP for the previous year up until the final deadline, including extensions, for tax filing. The Simplified Employee Pension Plan, referred to as a SEP, offers generous contribution levels investors should use to their advantage .

SEP IRA Maximum Contribution – Potential for Big Savings

Self Directed IRA Store — Mon, 14 Feb 2011 15:19:16 +0000

The Simplified Employee Pension Plan, known as a SEP, wasintended to assist self-employed workers and smaller businesses that may not have the resources for a more conventional retirement plan. Among the most appealing features of the SEP is the ease of setting up and handling the account, and the very high SEP IRA maximum contribution limit. In an employee plan, the employer sets the contribution level, often basing it on the company’s net profit and present-day economic conditions that influence the business . Contributions must be uniform for all qualified employees. The SEP IRA maximum contribution is $49,000 per year , or 25% of compensation, whichever is lower . An employee is eligible for the account if at least 21 years old, having worked for the employer for three of the last five years and having received at least $550 for that work. SEP accounts are appropriate for small businesses , and for LLCs, partnerships, sole proprietorships, and S and C corporations. The SEP IRA maximum contribution for self-employed individuals is calculatedin a different way, since the self-employed do not receive wages. It will be based on net profits from the business enterprise. The self-employed are allowed to contribute as much as 20% of net profits, up to $44,000. The calculation is net self-employed income minus one half of self-employment taxes to come to the net self-employment income, multiplied by 20% to determine the allowable contribution amount. Thisincreased SEP IRA maximum contribution allows the self-employed to save big , andrapidly. If the self-employed also have a full-time job, there’s even more opportunity to save the maximum amount annually and withcautious investment decisions accumulate a significant amount to be enjoyed at retirement. SEP plans are easy straightforward to establish and require very minimum documentation . Administration is equally easy and low cost . With the advantageous SEP IRA maximum contribution cap , it’s worth discovering the opportunities.

Get the Benefit of the SEP IRA Maximum Contribution

Self Directed IRA Store — Sun, 13 Feb 2011 15:00:35 +0000

Many people think of an IRA as an investment, when it really is a savings plan. The national average of interest rates paid for IRAs is relatively small, but remember, the interest is compounded. So by funding the maximum allowed amount and adding the accrued compounded interest, an individual could save enough to live nicely in retirement. That’s one of theappealing aspects of the SEP IRA. For the self-employed individual , the SEP IRA maximum contribution is a generous 20%, up to $44,000 annually . The self-employed do not receivewages, but rather have net profits from their business venture. Net profits are calculated by taking the net self-employment income and subtracting one half of the self-employment taxes. The resulting net/net self-employment income is then multiplied by 20% to come to the allowable contribution amount. SEP IRA accounta are also a solid option for LLCs, sole proprietorships, partnerships, S and C corporations, and small businesses that may not have the available resources for a more typical retirement plan. In an employer’s plan, theSEP IRA maximum contribution can be 25% of compensation , up to $49,000 per year . The employer decides on the amount , and contributions must be uniform for all qualified employees. A 20% contribution to one employee’s SEP account means asimilar 20% contribution must also be made to all eligible participants’ plans . The employer is not locked in to a certain percentage or frequency for contributions, and can review and adjust as business conditions dictate. The SEP might even be put on hold without contributions for a period of time. Often these decisions are reflections of business climate and the company’s net profit outlook . Playing an active role in preparing for retirement is a responsible thing to do, and the SEP accounts offer many advantages to think about. They are uncomplicated to establish and administer , inexpensive , and with the SEP IRA maximum contribution limits higher than most accounts , present a unique opportunity for rapid retirement savings.

SEP IRA Contribution Limit – Your Power Partner

Self Directed IRA Store — Sat, 12 Feb 2011 15:00:19 +0000

A Simplified Employee Pension Plan, generally known as a SEP, might be an ideal compromise for smaller companies that arenot able toprovide a conventional retirement plan for their employees . A SEP plan allows employees of a business to makelarger contributions to a traditional IRA through the company where they are employed . Many employees choose to join the plan because their contributions are taken from pre-tax income. The SEP IRA contribution limit in this case is 25% of the employee’s annual compensation, up to a maximum of $49,000 per year. The particularly generous SEP IRA contribution limit allows employees to quickly save for retirement. These plans are suitable for small companies , as well as for LLCs, S and C corporations, sole proprietorships and partnerships. Sep plans are also a verygood choice for the self-employed, but the self-employed SEP IRA contribution limit is calculated differently. Since the self-employed do not get wages, their contribution will be based on net profits from the business enterprise. Self-employed individuals may contribute 20% of net profits up to $44,000 per year. The contribution is calculated by taking the net self-employment income and subtracting one half of the self-employment taxes. The resulting net/net self-employment revenue is then multiplied by 20% to get to the contribution amount. Businesses caneasily qualify employees totake part in the plan. An qualified employee must be 21 years old , have worked for the company for three of the last five years, and been paid at least $550 in compensation for their work. Once the money is funded to the plan it isfully vested, and SEP contributions are portable. They can be rolled intoa differentplan , or in the event of a career change can be transferred to a different employer’s qualified retirement plan. With the greater SEP IRA contribution limit, these plans offer excellent opportunity in an easy to manage retirement program.

SEP IRA Contribution Limit – Make It Work for You

Self Directed IRA Store — Fri, 11 Feb 2011 15:00:35 +0000

You have until your final deadline, including extensions, to contribute to the previous year’s SEP IRA. The contribution must be made prior to filing your tax return. SEP accounts areappealing because they are simple to establish and easy to administer , with very little required documentation . Thegreater SEP IRA contribution limit provides an outstanding opportunity to rapidly shelter savings in a tax-advantaged plan as you prepare for retirement. Numerous smaller companies favor the SEP because it allows them toprovide retirement savings benefits for their employees. There are no mandated contribution requirements for the SEP plan , except that contributions must be consistant . A 20% contribution to one employee’s plan requires a comparable 20% contribution to all eligible employee accounts. The employer can make decisions on how often and what amount will be contributed annually , and sometimes bases the decision on the company’s net profit picture and current economic conditions that reflect on the business . No contribution isrequired, so the account can be put on hold if the employer chooses to do so. In a company plan, the maximum SEP IRA contribution limit is $49,000 annually, or 25% of the employee’s yearly salary . For a self-employed worker, the SEP IRA contribution limit is 20% or $44,000 per year, calculated on net profits of the business enterprise. These plans are easy to establish , and low cost to administer . Companies frequently have the accounts held by a mutual fund company, allowing the individual employees to select their own investments from the allowable fundsauthorized for the plan. Employees could select more aggressive investments or very conservative ones, depending on their personal needs and investment philosophy. Once contributed to their plan , the money is totally vested and can be rolled over into another type of IRA or, in the event of a job change, transferred to a new employer’s qualified retirement plan. The higher SEP IRA contribution limit is just one of the benefits that make a SEP worthy of consideration.

Learn About the SEP IRA Contribution Limit

Self Directed IRA Store — Thu, 10 Feb 2011 15:00:26 +0000

Contributions to a SEP IRA are normally 100% tax deductible and the investment earnings in a SEP IRA grow tax deferred. Any employer canset up a SEP, and the plan is especially appealing for smaller companies and the self-employed. Benefits of the plan include the low cost of setting up and managing it, themodest amount of paperwork required, the ease of qualifying employees for participation , and the increased allowed SEP IRA contribution limit. An employee is defined as someone at least 21 years of age who has worked for the company for three of the past five years and received a minimum of $550 in compensation. The employer can contribute up to 25% of the employee’s annual pay , or $49,000 per year on the employee’s behalf. Contribution levels must be uniform for all qualified employees, and the amount and frequency of contributions is decided on by the employer, who is allowed to evaluate and make changes for the account. There is no provision in the SEP plan for the catch-up contribution for older employees, however the greater SEP IRA contribution limitprovides an opportunity torapidly accumulate retirement savings within the account . Contributions are made in cash, not stock. Normally the SEP must be funded by the tax filing deadline. The SEP works well for the self-employed, who can make an annual contribution of 20% of their net profit, up to $44,000. It is suitable for S and C corporations, sole proprietorships, partnerships, and LLCs. Like other types of the traditional IRA, distributions from the account can begin as soon as age 59 ½ years old without incurring tax penalty, and must start no later than age 70 ½ years of age . The account is portable, so can be rolled into a different IRA or transferred to a new employer’s qualified retirement plan in the event of a change in employment. The generous SEP IRA contribution limit is a powerful reason to find out more about the plan

Why Higher SEP IRA Maximum Contributions Help You

Self Directed IRA Store — Wed, 09 Feb 2011 15:46:01 +0000

Simplified Employee Pension plans, or SEPs, are an increasingly used and well-liked plan offered to small companies , the self-employed, and suitable for use by S and C corporations, LLCs, sole proprietorships, and partnerships. Contributions to the SEP are normally 100% tax deductible and the investment earnings in a SEP IRA grow tax-deferred. There are quite a few benefits to the program , but the largest advantage could be the bigger SEP IRA maximum contribution level. Yearly contributions to an employee’s SEP IRA cannot exceed the lesser of 25% of yearly compensation , or $49,000 annually. The rules require the contributions must be uniform , so a 20% contribution to one qualified employee’s account triggers a requirement for a comparable 20% contribution to each qualified employee account. These contributions must be made in cash, rather than in stock. The SEP IRA maximum limit for self-employed individuals is calculated differently, since the self-employed do not receive wages. A self-employed person could contribute 20% of net profits from their business enterprise up to $44,000 annually . Similar to other forms of traditional IRAs, distributions from the SEP account can start as early as age 59 ½ without incurring tax penalty, although regular taxes will apply. The distributions must start by age 70 ½ years old. Employers are not required to contribute to employee accounts every year. They often will review the plan and make the contribution selection based on existing economicfactors and the company’s net profit picture . The SEP plan is affordable to establish and easy to manage , requiring a small amount of paperwork. Because of the higher SEP IRA maximum contribution limits participants have a good opportunity to save a increased amount of retirement funds in an accelerated manner. This is especially helpful for those people who may have started late in getting ready for their retirements. While there is no accomodation in the SEP for a catch-up contribution for older workers, the generousSEP IRA maximum contribution levels can offset that and make it possible for more savings every year

SEP IRA Maximum – Contribution to Retirement

Self Directed IRA Store — Tue, 08 Feb 2011 15:44:15 +0000

A SEP IRA allows for deferral of a considerable percentage of income into retirement investments where the funds can develop tax-free. You can make the SEP IRA contribution for the prior year up until the final tax filing deadline, including extensions. A SEP plan for a small business permits the employees to make a larger contribution thanks to the larger SEP IRA contribution limit, and often employees participate since contributions are taken from pre-tax income. Contributions to a SEP IRA are generally 100% tax deductible and the investment earnings in a SEP IRA grow tax deferred. Any employer can set up a SEP, and the account is particularly enticing for smaller businesses and the self-employed. Benefits of the plan include the low cost of establishing and administering it, the small amount of paperwork necessary, the simplicity of qualifying employees for participation, and the greater allowed SEP IRA maximum contribution. The employer can contribute up to 25% of the employee’s annual compensation , or $49,000 per year on the employee’s behalf. Contribution levels must be uniform for all qualified employees, and the percentage and frequency of contributions is determined by the employer, who is allowed to evaluate and make modifications for the SEP . There is no accomodation in the SEP plan for the catch-up contribution for older employees, even so the higher SEP IRA maximum offers an opportunity torapidly build retirement savings within the plan. Normally the SEP must be funded by the tax filing deadline. The SEP works well for the self-employed, who are permitted a yearly contribution of 20% of their net profit, up to $44,000. It is suitable for S and C corporations, sole proprietorships, partnerships, and LLCs. The plan is portable, so it can be rolled into a different IRA or transferred to a new employer’s qualified retirement plan in the event of a change in employment. The generous SEP IRA maximum limit is a powerful reason to learn more about the plan

From an employer’s standpoint, what is the difference between offering a 401K and a SEP IRA?

Mon, 07 Feb 2011 10:42:11 +0000

can a person contribute to a SEP and an Roth IRA at the same time?

Sun, 06 Feb 2011 06:13:48 +0000