SEP vs Simple

by Jan 7, 2020tax tips

Download the Flyer Here: SEP Vs Simple

A business structured as a sole proprietorship, partnership, limited liability company or corporation can set up either the SEP (Simplifi ed Employee Pension) IRA or the SIMPLE (Savings Incentive Match Plan for Employees) IRA. The business can be structured as either for-profit or not-for-profit.

Both Plans Offer:

  • Contributions that are deductible by the business, including contributions from the owner.
  • Tax-deferred savings for retirement.
  • Benefits to attract and retain employees.
  • No IRS testing or IRS Form 5500.
  • Relatively low account and administrative cost.

Additional Considerations:

  • Part-time employees must be included if they meet eligibility requirements.
  • Employees who receive contributions are immediately 100% vested.
  • You cannot maintain another qualified plan if you operate a SIMPLE IRA.
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