Owners of SEP IRAs should accept a archetype of Form 5305-SEP from their employer.
Simplified agent pensions acquiesce administration to advice board cogent retirement assets for their advisers after abounding of the costs in acceptable alimony plans. Administration can accord up to 25 percent of an employee’s accomplishment to the SEP and can acclimatize anniversary year’s contributions to board banknote breeze considerations. One account of SEPs is that they do not crave administration to book a Form 5500. Advisers who participate in an SEP accept no filing requirement.
The Agent Retirement Assets Security Act of 1974 alien a cardinal of requirements for administration accouterment retirement benefits. The Department of Labor, Internal Revenue Service and the Alimony Account Guaranty Board developed Form 5500 to accord administration a automated way of acknowledging with ERISA advertisement standards. Alimony affairs and employers, not employees, book Form 5500.
If an employer offers alone SEPs for its employees, it does not charge to book a Form 5500. Instead, it can authorize the best tax analysis for the SEP by commutual a Form 5305-SEP or drafting its own plan document. Advisers charge accept a archetype of the Form 5305-SEP acceding to absolutely authorize the SEP. Form 5305-SEP is for advisory purposes only, and neither advisers nor administration book it with the IRS or any added authoritative body.
Simplified agent pensions acquiesce administration to armamentarium alone retirement accounts created for anniversary employee. Alone the employer contributes to these IRAs and may accord 25 percent of agent accomplishment up to a limit. For 2013, the best an employer can accord for one agent is $51,000. Addition rates, as a allotment of income, charge be according amid employees. Advisers don’t address their employers’ contributions to their SEP-IRAs on their taxes, but back they accomplish withdrawals, they pay taxes on the absolute withdrawal.
With the barring of SEPs created afore 1997 that are grandfathered in, alone administration accord on account of the employee. If you participate in your employer’s SEP, your addition banned to added IRAs may be bargain because you are covered by an employer’s retirement plan. Standard IRA abandonment rules administer to your SEP-IRA, including penalties for aboriginal withdrawals and appropriate minimum distributions alpha at age 70 ½.
Sean Butner has been autograph account articles, blog entries and affection pieces back 2005. His accessories accept appeared on the awning of “The Richland Sandstorm” and “The Palimpsest Files.” He is commutual alum coursework in accounting through Texas A&M University-Commerce. He currently advises families on their allowance and banking planning needs.
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