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A SIMPLE Retirement Plan
for the Self-Employed
 Of
all the retirement plans available to small business owners,
the SIMPLE plan is the easiest to set up and the
least expensive to manage.
These plans are intended to encourage small business employers
to offer retirement coverage to their employees.
SIMPLE plans work well for small business owners who don't
want to spend time and high administration fees associated
with more complex retirement plans.
SIMPLE plans really shine for self-employed business owners.
Here's why...
Self-employed business owners contribute both as employee
and employer, with both contributions made from
self-employment earnings.
SIMPLEs calculate contributions in two steps:
 Employee
out-of-salary contribution.
The limit on this "elective deferral" is $11,500 in 2010,
after which it can rise further with the cost of
living.
Catch-up. Owner-employees age 50 or over can make a
further $2,500 deductible "catch-up" contribution as employee
in 2010.
 Employer
"matching" contribution
The employer match equals 3% of employee's earnings.
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Example: A 52-year-old
owner-employee with self-employment earnings of $40,000
could contribute and deduct $11,500
as employee plus a further
$2,500 employee catch-up contribution, plus
$1,200 (3% of $40,000)
employer match, or a
total of $15,200. |
The rest of the article talks
about What's Not So Good About SIMPLES, Keogh's, SEP's and
SIMPLES compared and What's Not So Good About Simples.
For more cash flow information
click on the
rest of the article.
Or if you want to talk or ask me questions, call me, Paul Sullivan, at 240-316-3531.
As always you can call our offices if you have any
questions about these or any other accounting related issues, at 301-657-8080.
Regards, Paul Sullivan, CPA |
