Interactive Review
Course #10073
Retirement Plans for Small Business
(SEP, SIMPLE & Qualified Plans)
IRS Publication 560
Definitions You Need To Know . . ………………………… .. . 1
Simplified Employee Pension (SEP) . . . . . . . . . . . . . . . . . . .. . . 3
Setting Up a SEP
Deducting Contributions
Salary Reduction Simplified Employee Pension (SARSEP)
Distributions (Withdrawals)
Additional Taxes
Reporting and Disclosure Requirements
SIMPLE Plans ………. . ………………………………………..2
SIMPLE IRA Plan.
SIMPLE 401(k) Plan
Qualified Plans…………………………… . . . . . . . . . . . . . . . . . 5
Setting Up a Qualified Plan
Contributions
Employer Deduction
Distributions
Prohibited Transactions
Reporting Requirements
Qualification Rules
Total Review Questions……..…..……………..……………..11
1. For SIMPLE plans, net earnings from self-employment is the amount after subtracting any contributions made to the SIMPLE plan for yourself.
Simplified Employee Pension (SEP)
Setting Up a SEP
2. Employees covered by a union agreement and whose retirement benefits were bargained for in good faith by the employees’ union and you can be excluded from coverage under a SEP.
Simplified Employee Pension (SEP)
Deducting Contributions
3. If you are self-employed, you cannot deduct the contributions you make each year to your own SEP-IRA.
Simplified Employee Pension (SEP)
Salary Reduction Simplified Employee Pension (SARSEP)
4. Participants (including employees hired after 1996) in a SARSEP set up before 1997 can continue to have you contribute part of their pay to the plan.
SIMPLE IRA Plan.
5. You can set up a SIMPLE IRA plan only if you had 100 or more employees who received $5,000 or more in compensation from you for the preceding year.
SIMPLE 401(k) Plan
6. A SIMPLE 401(k) plan is a qualified retirement plan and generally must satisfy Qualification Rules.
7. There are two basic kinds of qualified plans defined contribution plans and defined benefit plans.
Setting Up a Qualified Plan
8. If you are self-employed, your must have employees other than yourself to sponsor and set up a qualified plan.
Employer Deduction
9. You can usually deduct, subject to limits, contributions you make to a qualified plan, including those made for your own retirement.
Prohibited Transactions
10. A transfer of plan income or assets to, or use of them by or for the benefit of, a
disqualified person is not a prohibited transactions.
Qualification Rules
11. Your plan can provide for payment of retirement benefits before the normal retirement age.
Copyright © 2007 By
CPE Accounting and Tax Institute
All Rights Reserved