SEP Plans

If you are an employer, establishing a SEP (Simplified Employee Pension Plan) may be ideal for you if you are a:

1. Sole Proprietor
2. Partnership
3. Corporation
4. “S” Corporation
5. Limited Liability Partnership (LLP)
6. Limited Liability Company (LLC)
7. Tax-Exempt Organizations

A SEP Plan lets you make tax-deductible contributions for you and your eligible employee(s).  Speak to a tax advisor if you are considering establishing a SEP plan.

Contributions

For annual contributions:

• The maximum contribution for a SEP Plan is the lesser $49,000 or 25% of your compensation for the plan year 2010 (same for 2011).
• Employees can make their personal IRA contribution into the SEP IRA account limited to $5,000 in 2011 ($6,000 if 50 or older)

Employers - Establishing a SEP Employer Plan 

The employer may complete either IRA Model 5305-SEP or a prototype plan agreement.  The employer is required to provide a copy of the agreement to each and every employee/SEP IRA participant.

To establish a new SEP IRA

A SEP IRA is a Traditional IRA that accepts employer contributions under an employer’s SEP plan.  A SEP IRA is funded by employer contributions. You may make your annual Traditional IRA contribution into your SEP IRA.  Your IRA contributions are based on the annual IRA contribution limits as set forth by the IRS and are subject to your individual tax filing deadline without extensions.