I moved to consulting status - now what? This transition can be confusing, but as long as you stay organized you will be fine. Here are some recommendations to help get you started.Read More
Blogs Written by PWR Advisors
Consider a SEP-IRA. A Simplified Employee Pension (SEP) plan is a retirement savings vehicle available to those who are self-employed. This past year, I came across a handful of new clients who were self-employed and not aware of a SEP-IRA and its benefits. The following is a summary focused towards business owners who do not have employees. You can use the SEP-IRA with employees, but I do not go into the details of that below. A SEP-IRA follows the same investment, distribution and rollover rules as traditional IRA’s. The amount you can contribute is based on a formula. The IRS demonstrates this with an example here.
The due date for contributions is the due date of your business income tax return including extensions. There is flexibility with the contributions in that you can contribute in some years and not others. The SEP can also be paired with other retirement savings vehicles. For example, you can contribute to a Roth IRA in addition to a SEP-IRA.
As you prepare to gather information for your taxes in the next few months, remember the SEP-IRA. It may be a good retirement plan for you. To learn more, review IRS Publication 560 and check with your tax preparer.
Image courtesy of hin255/Freedigitalphotos.net