|Not Insured by FDIC or
Any Other Government Agency
|Not Bank Guaranteed||Not Bank Deposits or Obligations||May Lose Value|
|SMALL BUSINESS||RETIREMENT ACCOUNTS||SELF EMPLOYED|
(Simplified Employee Pension IRA)
|Description||As a small business owner, you can make tax-deductible contributions.||
As a small business owner with no employees, you may be able to contribute more than with other types of retirement plans.
|Eligibility to Contribute||If you are a small business owner, you can contribute at any age.||If you are self-employed, a spouse, or a business partner you can contribute at any age.|
|Annual Maximum Contributions||As a small business owner, you are eligible for the following:
2020 tax year:
Contribute up to 25% of your compensation or $57,000 whichever is less
|Contributions are funded from a salary.
Deferral, profit sharing or a combination thereof.
2020 tax year:
Profit sharing: up to 25% of compensation or $19,500($26,000 if 50+ years of age)
Combination may not exceed $57,000
|Tax Deductible Contributions||Your contributions and your employees contributions are deductible from your company's federal taxable income.||Your contributions and your business partners contributions are deductible from your company's federal taxable income.|
|Earnings and Withdrawal Taxation||Tax-deductible contributions and earning are taxed as ordinary income when withdrawn.||Tax-deductible contributions and earning are taxed as ordinary income when withdrawn.|
|Premature Withdrawal Penalties||10% IRS early withdrawal penalty if withdrawn before age 59 1/2 unless an IRS exception applies- No penalties for 2020 if COVID-19 related.||10% IRS early withdrawal penalty if withdrawn before age 59 1/2 unless an IRS exception applies- No penalties for 2020 if COVID-19 related.|
Must begin at age 72- 2020 is now optional.
|Must begin at age 72- 2020 is now optional|