|Not FDIC Insured||Not Bank Guaranteed||May Lose Value|
|Not Insured by Any Government Agency||Not a Bank Deposit|
|SMALL BUSINESS||RETIREMENT ACCOUNTS||SELF EMPLOYED|
|SEP IRA |
(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-emplyed, 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: |
2018 tax year: contribute up to 25% of your compensation or $55,000 whichever is less.
2019 tax year: contribute up to 25% of your compensation or $56,000 whichever is less.
If you have employees, you may be required to contribute for them as well.
|Contributions are funded from salary. |
Deferral, profit sharing or a combination thereof.
2018 tax year:
Profit sharing: Up to 25% of compensation or $54,000
Salary deferral: Up to 100% of compensation or $18,500 ($24,500 if 51+ years of age)
Combination may not exceed $54,000
|Tax Deductible Contributions||Your contributions and your employees contributions are deductible from you 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|Earnings and Withdrawal Taxation||Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn.||Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn.|
|Premature Withdrawal Penalties||10% IRS early withdrawal penalty if withdrawn before age 59 ½ unless an IRS exception applies.||10% IRS early withdrawal penalty if withdrawn before age 59 ½ unless IRS exception applies.|
|Required Withdrawals||Must begin at age 70 ½.||Must begin at age 70|