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Make Your Decision with Accurate SEP IRA Information

By Guest Author On May 18, 2011 Under Success Secrets

Looking for SEP IRA information? Understanding the plan and its rules and regulations will make your decision more informed . Why consider a SEP IRA for your small company ? Many advantages are structured into the SEP , specifically to assist small companies and the self-employed who might not have the resources available for a more conventional kind of retirement program . The Simplified Employee Pension Plan, commonly called SEP, can become an excellent source of retirement income, and is simple to establish , with a low cost to administer. Researching SEP IRA information, you will learn that the contributions limits are especially generous , as much as 25% of annual compensation, allowing the qualified participant to rapidly accumulate retirement wealth in a tax-advantaged environment. The contributions are tax deductible and the company pays no taxes on the investment earnings . The business is not obligated to set contributions, and might make an annual determination about the percentage and frequency, perhaps even putting contributions on hiatus if warrented by economic or business conditions. Some companies decide on the contribution level on profitability for the year. Usually there are no requirements for filing IRS documents associated with the SEP plan . A SEP IRA is appropriate for sole proprietorships, LLCs, partnerships, and S and C corporations. Businesses might also be eligible for a special tax credit of up to $500 per year for each of the first three years operating the plan to recoup the expense of setting up the plan . Other important SEP IRA information to be aware of includes rules on which employees will be eligible to participate. The employee must be at least 21 years old, have worked for the business for three of the past five years, and have been paid at least $550 in compensation. Distributions from the SEP can start as early as age 59 ½, although earlier withdrawal will trigger regular income tax and an additional 10% IRS penalty tax. Like most other IRAs, required disbursements must begin by age 70 ½. Getting accurate SEP retirement information will help you choose wisely. .

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