SIMPLE IRA
SIMPLE IRA
For businesses with 100 or fewer employees and self-employed individuals.
PLAN DETAILS
SIMPLE IRA
A Savings Investment Match Plan for Employees (SIMPLE IRA) makes it easier for self-employed individuals and small-business owners with 100 or fewer employees to offer tax-advantaged retirement plans.
SIMPLE IRA plans can be established by any business with 100 or fewer employees who earned $5,000 or more in the preceding year, and which does not currently maintain any other retirement plan.
- Eligibility varies based on the election you chose when you adopted the plan. Employees should be notified no later than as soon as they become eligible.
- You are eligible for a SIMPLE IRA as long as your business has fewer than 100 employees earning $5,000 or more in the preceding year. As you grow, other retirement plans may become more appropriate.
Key facts and details
Eligibility
If you are self-employed or own a business with 100 or fewer employees, you are eligible to establish a SIMPLE IRA plan, as long as it is the only retirement plan you fund. Companies maintaining another employer-sponsored retirement plan in the same year are not eligible. You must generally include all employees age 21 and over if they received at least $5,000 in compensation during any two prior years and if you reasonably expect that they will receive at least $5,000 in the current year.
Tax Benefits
Who contributes
Contribution amounts
Employer:
Mandatory match or non-elective contribution. Mandatory 3% matching contribution or 2% non-elective contribution.
Participants:
Funded by employer contributions.
Withdrawals
Fees
Administrative responsibilities
Deadlines
Matching contributions are due no later than the due date for filing your business’s income tax return including extension.
How to make contributions
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