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Savings Incentive Match Plan for Employees of Small Employers

An IRA or 401(k) plan for employees of small businesses, usually with fewer than 100 employees. The employee may make tax deductible contributions, and the employer may contribute in one of two ways. The employer may either match employee contributions up to 3% of the employee's annual salary, or provide a contribution of 2% of the salary regardless of how much the employee contributes. The employee controls the investment of the contributions.


A savings incentive match plan for employees that is similar to but more flexible than an IRA for businesses with 100 or fewer employees. Employees enter into a qualified salary reduction agreement to contribute a percentage of their annual compensation to a tax-deferred retirement account.


A SIMPLE, also known as a SIMPLE IRA, is short for Savings Incentive Match Plans for Employees, an employer sponsored retirement savings plan that may be offered by companies with fewer than 100 employees.

Employers must contribute to eligible employees' accounts each year in one of two ways. They can make a contribution equal to 2% of salary for every employee, or match dollar-for-dollar each employee's contribution to the plan, up to 3% of that employee's annual salary.

A SIMPLE may be set up by establishing an IRA in each employee's name or as a 401(k). Congress sets an annual dollar limit on the tax-deferred amount an employee may contribute, based on the type of SIMPLE it is. Contribution ceilings for SIMPLE-IRAs are lower than for other employer sponsored plans.

You may withdraw assets from a SIMPLE without penalty if you are 59 1/2 or older and retired. And you must begin taking minimum required distributions by April 1 of the year following the year you turn 70 1/2 unless you're still working. Taxes are due on distributions at your regular tax rate.

You may roll your assets over into another employer plan or an IRA if you leave your job for any reason or retire.

Two key differences between SIMPLEs and other employer plans are that your account must be open at least two years before you can withdraw or move the money, and the federal tax penalty for early withdrawal is 25% of the amount you take, rather than 10%.

References in periodicals archive ?
These reforms will not only reduce compliance costs--thereby enhancing the country's competitiveness--but they will also signal Congress's continued commitment to the simplification of the tax law generally.
I am grateful that the ABA Section of Taxation, the AICPA Tax Division, and the Tax Executives Institute have put so much time and effort into these tax simplification recommendations.
Upon the consummation of the simplification transactions, all of the outstanding AHGP common units will be canceled and cease to be publicly traded.
The closing of the Simplification Transactions, which is currently expected to occur in the second or third quarter of 2018, is subject to the satisfaction of customary closing conditions, including the approval of the Simplification Agreement by the affirmative vote or consent of holders of a majority of the outstanding AHGP common units, and the effectiveness of a registration statement on Form S-4 to be filed with the Securities and Exchange Commission (the SEC) by ARLP with respect to the distribution of the Exchange Units.
The minister said that simplification of the return filing process was a major topic of discussion, as the Council felt that the Ministers' group, the IT committee and Nandan Nilekani should discuss simplification process and formalise the alternative system following a video conference meeting soon.
In the following sections, we look at the key components of a simplification program that can lay the foundation for a robust digital enterprise.
A simplification of the rules surrounding livestock movement recording and reporting has been a key lobbying aim for NFU Cymru for the past 15 years.
A higher de minimis threshold of at least $2,500 would greatly ease taxpayer burden, and a threshold of $5,000 would go even further to achieving the intended goal of taxpayer simplification by eliminating the difference between taxpayers with and without an AFS as it relates to the de minimis safe harbor limit.
He said: "It's certainly added more focus to the simplification that is going ahead but it certainly hasn't been triggered by that.
The articles published in this special issue of Contemporary Drug Problems were originally presented at the Aarhus conference and all explore questions of complexity and simplification in relation to alcohol and other drugs.
Benkirane preside une reunion sur la simplification
These decisions are related to simplification of tax reporting, simplification of gold purchases, improvement of the public-private partnership mechanism, use of land and distribution of agricultural land.