You still have time to establish these retirement plans
The problem with time is that you always think you have enough. And yet fall is already here, and the time for establishing a retirement plan for your business is ticking down to the deadline. Here are two plans with upcoming due dates.
- Savings Incentive Match Plan for Employees (SIMPLE). The deadline for setting up a SIMPLE for your business is October 1. SIMPLEs are easy to establish and maintain. You can use an IRS "model" document to set up your plan, and you're not required to file an annual retirement plan return with the IRS. Your business can deduct contributions made on behalf of employees. In addition, you may be eligible for a credit of up to $500 to offset the cost of establishing a plan and getting your employees enrolled.
The maximum contribution for SIMPLE plans in 2016 is $12,500, plus an extra $3,000 when you're over age 50.
- Simplified Employee Pension plan (SEP). If you're a sole proprietor and you requested an extension of time to file your tax return, the last day to establish and fund a SEP is October 17. You set up a SEP by signing a plan document such as IRS Form 5305-SEP, Simplified Employee Pension - Individual Retirement Accounts Contribution Agreement. Contributions are deductible, and you don't have to file an annual return with the IRS.
For 2016, the maximum contribution is $53,000.
Not sure which plan will suit your business? Contact us for a detailed comparison.
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The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.