SEP IRA Questions?

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solo 401k (moderator)
Posted 2006-12-20 13:27:46

This is were you ask your questions about a SEP IRA

SEP-SOLO-IRA-401k-ROTH (moderator)
Posted 2006-12-26 10:26:43

I have incorporated this year and am looking to set up a SEP IRA. Is it fairly easy to do? Do I just go to any brokerage such as Fidelity and open an account? As I understand I am allowed to put in 25% of the salary I pay to myself. I set up the copr in May. If I pay myself $60,000, does that mean I can put in $15,000 in SEP IRA? Is there a deadsline like December 31st to set one up for 2006? Thanks.

brent
Posted 2006-12-28 18:39:12

1. I have incorporated this year and am looking to set up a SEP IRA. Is it fairly easy to do?

Yes. The SEP IRA does take a couple of addition steps more than a cash account but it is very easy.

2. Do I just go to any brokerage such as Fidelity and open an account?
Yes. Every firm that I know has a SEP IRA option.

3. As I understand I am allowed to put in 25% of the salary I pay to myself. I set up the copr in May. If I pay myself $60,000, does that mean I can put in $15,000 in SEP IRA.
Yes. Up to 15,000 but you must match any other worker with the same percentage, in this case 25%. Be careful if your not a Sole Proprietor it's a different calculation.

If you are the only employee I would think a Solo 401k you would be much better, you could put up to $30,000 away in a Solo 401k.

4. Is there a deadsline like December 31st to set one up for 2006?

Yes. The day you file.