When you choose a SEP, you make contributions to a Traditional IRA for yourself and your employees, if applicable. If you choose to contribute to your plan, you have the ability to choose the percentage of contribution for any given year (0 – 25% of earned income) both for yourself and your staff. The only requirement is that the contribution percentage, in any year, be the same for each employee.
SEP IRA Rules
- The SEP IRA is a retirement plan designed to benefit self employed individuals and small business owners. Sole proprietorships, S and C corporations, partnerships and LLCs qualify.
- The SEP IRA has a maximum contribution limit of $49,000 for 2009.
- Contributions to a SEP IRA are generally 100% tax deductible.
- Contributions to a SEP IRA are made exclusively by the employer. Employees do not contribute.
- Withdrawals from a SEP IRA are permitted after age 59 1/2 without penalty.
Contact us to learn more about how a SEP IRA can benefit you.