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A SEP (Simplified Employee Pension) IRA is an employee benefit
plan with compliance and reporting requirements simpler than those
for qualified plans. For that reason, SEP IRAs are attractive for
sole proprietors and small companies (up to 100 employees). Contributions
(tax deductible to employers) must be made to IRAs because IRAs
are the funding vehicle for SEPs.
Contributions are limited to 25% of adjusted gross income or $41,000, whichever is less.
SEP participants can still contribute up to $4,000 (or $4,500 if over 50) to an IRA. However, because a SEP is an employee benefit retirement plan, an active participant in a SEP may not be able to deduct non-SEP contributions.
The employer has until its tax filing date for its business, including any extensions, to make SEP contributions.
In order to open up a SEP IRA with PENSCO Trust, you must complete an IRA Application and an IRS Form 5305-SEP. Click here to complete the paperwork.
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