Simple IRAs for Business Owners
Start a Simple IRA Plan to benefit you and your employees in 2016
A SIMPLE IRA plan offers your company some important benefits.
Easy to set-up and maintain. There are no complex reporting requirements, unlike a 401(k). Contributions are made electronically.
Low administrative costs. SIMPLE IRAs are a low cost alternative for small business owners with limited financial resources who want to establish a retirement plan for their employees.
Save more, tax-deferred, than is possible with a traditional IRA. The SIMPLE IRA offers immediate tax savings to both you and your employees. Business owners and employees may defer up to 100% of compensation, with a maximum contribution of $12,500. Those aged 50 or over may contribute an additional $3,000.
Employer contributions are flexible and tax deductible. Employer contributions may be changed annually, and range from a dollar-for-dollar match up to 3% of pay, (which may be reduced to as low as 1% for two of every five years) or a non-elective contribution of 2% of pay for each employee. Employer contributions are fully deductible as a business expense up to certain limits. Additionally, employee pre-tax payroll contributions reduce the amount of employees' taxable income for the same year.
To find out if your business can benefit from a SIMPLE IRA plan, call 480-275-5219 to schedule a consultation with Michelle Patel, CFP®.