A SEP IRA
is described in Section 408(k), and a SIMPE IRA is described in Section 408(p).
The rules for post-70 1/2 IRA contributions depend upon whether the account is a traditional IRA, Roth IRA or SEP IRA
To qualify for the bonus, the deposit can be in the form of rollovers, trustee-to-trustee transfers and individual contributions (up to annual contribution limits), and may be met with multiple deposits across traditional, Roth, SEP IRA
plans and IRA accounts.
Your main options are the SEP IRA
, the SIMPLE IRA and the solo 401(k) plan, which allow you to deduct your contributions, let your earnings grow tax-deferred and get taxed on withdrawals in retirement.
Some business owner clients can take this a step further, by establishing and contributing to a SEP IRA
, which in some cases can be done as late as October 15, 2014 for 2013.
Last day to establish a qualified retirement plan for 2012 SEP IRA
plans may be established until the tax-filing deadline (generally April 15) plus extension
A SEP IRA
(or simplified employee pension individual retirement account), allows you to contribute up to 25% of your annual income, with a cap of $49,000.
Under current tax rules, a self-employed person earning less than $46,000 from his or her business could make a greater contribution to a SIMPLE IRA than to a SEP IRA
So, an SEP IRA
can be used to shelter a fair amount of income from tax, and these contributions will grow on a tax-favored basis until distributions begin at age 70 1/2.
A SEP IRA
is available to employees age 21 and older, with the employer making the contributions.
Fidelity did report that Foss had assets worth approximately $224,000 in a SEP IRA
and $835,000 in a traditional IRA, but Foss's attorneys have argued that IRA assets are exempt.
As an example, Mark Smith is a small business owner who has $500,000 invested in a SEP IRA
established by his company.